DOJ Investigating Predatory Cable Pricing

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The Department of Justice is investigating an unnamed cable company to
determine whether the firm has engaged in predatory pricing to harm a
competitor.

The investigation was revealed Thursday in Senate testimony by Charles James,
chief of the DOJ's Antitrust Division.

James, appearing before the Senate Antitrust, Competition, Business and
Consumer Rights Subcommittee, was asked to respond to allegations that
established cable operators have slashed prices in a manner designed to injure
new wireline competitors, also called overbuilders.

James said at least one cable company was under investigation, but he did not
provide the name

'I know for a fact that we have at least one circumstance in which
allegations of predation involving an overbuilder are under investigation and we
are taking a serious look at it,' said James, whose division is currently
reviewing the proposed cable merger between AT&T Broadband and Comcast
Corp.

Testifying before the same subcommittee in April, Mark Haverkate, CEO of
cable overbuilder WideOpenWest LLC, complained that Comcast and AT&T
Broadband were running a price-slashing campaign that was anti-competitive
because it targeted WOW customers, or Comcast and AT&T Broadband customers
thinking about switching to WOW.

AT&T Corp. chairman and CEO C. Michael Armstrong responded by saying that
AT&T Broadband's cable pricing was designed to meet competition not just
from WOW, but from other pay TV providers.

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