N.Y.s Spitzer Comes Out Firing at Cable

Author:
Publish date:
Updated on

New York State Attorney General-elect Eliot Spitzer rocked
the cable industry with his comments on a New York City weekend-news program, and he was
desperately attempting damage control less than a week later.

Spitzer, appearing Dec. 27 on WCBS-TV Channel 2's Sunday
Edition
, vowed to use the antitrust powers of his office to force more competition
into the industry and to curb the purchase of professional-sports teams by cable
conglomerates.

Spitzer singled out Time Warner Cable in Manhattan and
Cablevision Systems Corp. in Woodbury, N.Y., accusing the former of strong-arm tactics in
obtaining cable franchises and the latter of violating antitrust laws in its reported
attempt to purchase the New York Yankees Major League Baseball club.

But just two days after the broadcast, Spitzer appeared to
be contrite, stressing through a spokesman that his comments on the broadcast were not a
cause for alarm in the cable industry.

"We appreciate the telecommunications industry for the
fact that it is a growth industry and an industry in which New York can claim to be a
leader," said Darren Dopp, a spokesman for Spitzer. "We are very interested in
having an open dialogue."

Dopp added that Spitzer hoped to meet with the Cable
Television Association of New York State within the first few weeks after taking office
Jan. 1.

Spitzer came on like gangbusters during the Dec. 27
broadcast.

In the case of Cablevision, Spitzer claimed that the MSO --
which already owns the

New York Rangers National Hockey League and New York Knicks
National Basketball Association teams, as well as Madison Square Garden -- is in a
position to monopolize sports in the metropolitan area.

Spitzer took exception to sports-team purchases by
companies that not only own the venue that the team plays in, but that also control the
cable channels on which their games are beamed to the masses.

"I will be in a position, through the antitrust laws,
to stop those purchases that will violate the antitrust laws, and I will do that,"
Spitzer said during the broadcast.

In a prepared statement, Cablevision replied: "We look
forward to briefing the attorney general-elect on the many complex issues surrounding our
various businesses and, particularly, the comprehensive federal and state review and
approval of our recent transactions."

Time Warner caught Spitzer's attention during the broadcast
for what he claimed were hardball tactics against landlords and government officials when
trying to obtain franchises.

"I believe that Time Warner has improperly said to
certain sets of buildings or government entities, 'If you keep out our competition, we'll
give you certain compensation.' That's wrong, it's improper and it shouldn't happen,"
he said. "We will have both civil and criminal authority in this area, and we're
going to use it."

Harriet Novet, a spokeswoman for Time Warner Cable New York
City, said Spitzer's comments were untrue.

"It is disappointing that he would take this position,
especially before he has officially taken office. Time Warner operates completely within
the purview of all laws. We comply with all federal, state and city laws, and we encourage
competition in the marketplace. We would love to sit down with him and walk him through
our business practices," Novet said.

Dopp stressed that Spitzer did not mean to imply that his
office would recklessly prosecute cable companies. Instead, he was pointing out that the
office does have certain legal options in consumer matters, and that he would use every
one at his disposal.

"His special focus will be on helping localities with
franchise agreements," Dopp said. "His special charge, and the reason why he was
elected, was that he would be aggressive in fighting for consumers. Over the long term,
you will find that the Spitzer approach is a balanced approach," Dopp added.

Related