For many, many years there have been disputes between cable TV providers and the TV companies over what channels the cable (and satellite) guys need to provide. The TV companies often "bundle" smaller channels that don't get many viewers along with the popular "must have" channels. Part of their argument is that this allows those smaller channels to exist in the first place, as they'd be economically nonviable without the subsidy from the super popular channels. Of course, the cable/satellite providers (and many consumers) argue that this is waste, pure and simple, and it means higher bills. It appears that Cablevision is finally trying to do something about this, and has filed an antitrust lawsuit against Viacom for forcing it to carry the channels it doesn't like, specifically channels like Palladia, MTV Hits and VH1 Classic. Cablevision has to carry those if it wants the channels that people actually watch, like MTV, Comedy Central and Nickelodeon.

Oddly, we can't show you the full lawsuit, because it's been filed under seal. You see that sometimes when it involves contractual disputes, since the terms in the contract are secret. However, it's rather unfortunate that they couldn't file the document with the secret stuff redacted. At this time, we just have Cablevision's side of the story via their press announcement. The key argument is that this is an illegal "tying" arrangement. Of course, just last year we had a ruling in a similar lawsuit, in which cable customers filed a similar suit, which flopped in court.

Cablevision may have a difficult time making this claim succeed as well. As Viacom quickly pointed out in response, the bundling is not "forced." Pay TV companies can choose individual channels without other channels, it's just that the price is higher. So, they argue, the bundling actually leads to discounts. Whether or not anyone actually believes that claim may become a key question in the lawsuit. If I had to do an initial handicapping, though, I'd guess that Viacom wins this one, even if Cablevision can make Viacom (and others) sweat for a bit. In the long run, however, this is still about fighting the last battle. The idea of TV channels is an increasingly obsolete concept. This fight is over the way video content was distributed. Not the way it will be distributed in the future.

Over the years, one topic that seems to engender extremely passionate responses around here is the question of cable TV bundling. People hate bundled cable TV packages -- usually because they hate paying for a bunch of channels they don't want just to get the four channels they do want. I still tend to think this complaint is overstated -- if the cable guys priced things out a la carte, the pricing would basically come to the same thing anyway (the channels you do want would be super expensive, and the ones you don't would be pretty cheap or free with other channels). Either way, the complaint also seems increasingly antiquated in an internet world. More and more TV shows are moving to the web anyway (through both authorized and unauthorized means). While it's certainly not perfect yet, you can create your own a la carte solution for many TV shows/channels.

Still, some folks sued over this bundling, claiming that it was anti-competitive. However, as Eric Goldman alerts us, an appeals court has upheld a lower court decision and outright rejected the idea that bundling is an antitrust issue. The court points out that "tying" arrangements are only illegal if they lead to clear anticompetitive behavior and consumer harm, but that's missing here:

The complaint does not allege that Programmers’ practice of selling “must-have” and low-demand channels in packages excludes other sellers of low-demand channels from the market, or that this practice raises barriers to entry into the programming market. Nor do the plaintiffs allege that the tying arrangement here causes consumers to forego the purchase of substitutes for the tied product.... Nothing in the complaint indicates that the arrangement between the Programmers and Distributors forces Distributors or consumers to forego the purchase of alternative low-demand channels.

The court notes that the only real complaint is that the contract between the parties limits what kinds of offerings can be made by the cable companies, but the court notes that third parties suing over others' contracts that limit some actions "is not sufficient to allege an injury to competition."

I think it's pretty silly that cable companies haven't innovated to the point that a la carte offerings are regularly available. I recognize that the issue here is more about programmers requiring the bundles to get the "must have" channels, so the cable providers are a bit hamstrung, but sooner or later the cable companies need to convince the programmers that lumping stuff together just pisses off consumers, and they might as well offer up an a la carte solution instead.

Microsoft's increasing regulatory headache from the European Commission concerns its Internet Explorer browser that comes standard with Windows. We've said before that this investigation is prima facie silly given the vibrant and increasing competition in the browser market, but it looks like things are just going to get worse for Microsoft. First, it was Mozilla deciding to complain that Microsoft was creating an unhealthy browser market by bundling IE with Windows. Now, Google is jumping onto the bandwagon and arguing that Microsoft's policy limits competition and harms innovation.

This is primarily problematic because the browser market is anything but uncompetitive. Firefox has created what is widely considered a better product, and, wouldn't you know it, gained considerable market share around the world (as high as 30% in some regions). More recently, Google introduced its own browser, Chrome, that launched to accolades and much user adoption. By introducing regulators into the browser market, these companies will all be distracted from providing users with the best possible product.

But what's even more confounding is Google's involvement. Obviously the company desires control of most browsers so it can set the defaults in its favor, but it is increasingly obvious that Google should not be bringing regulatory attention to the Internet -- especially when it comes to antitrust questions. Although claims of Google's "monopoly" are as specious as Internet Explorer's, making noise about antitrust is likely to come back and bite Google, especially given the rising number of political enemies they have.

Last month, it seemed silly that EU regulators were pursuing Microsoft for antitrust violations in the browser market for bundling IE. It was clear that some of the initial complaints had come from Opera -- an also-ran in the browser market. However, it seemed silly because there is vibrant and growing competition in the marketplace. Firefox has continued to grow its market share, and in the past few years we've seen new entrants in the browser market from Apple and Google -- both of whom have established small, but significant footholds.

So, it's especially disappointing to read that the Mozilla Foundation appears to be siding with the regulators, complaining about Microsoft's actions. Obviously, Mozilla is competing with Microsoft in this space, so at a first pass it may seem in their best interests to lobby the EU to punish Microsoft. But it's disingenuous to say the least. Mozilla got where it did because it competed effectively. It built a better, more secure browser that many people made the choice to support over IE. In fact, Firefox's chief architect, apparently unaware of what his "bosses" were cooking up, seems to have recently contradicted the Mozilla Foundation's new position, where he admitted that he couldn't see how anyone with a straight face could claim that Microsoft's ability to bundle created a monopoly, noting that Firefox's success in growing marketshare showed that making yourself "demonstrably better" worked. Oops.

Microsoft is becoming quite the antitrust punching bag over in Europe. After a years long fight concerning antitrust charges in Europe, Microsoft finally gave in and agreed to pay up. So, now the matter is over with, right? No, of course not. EU regulators are back at it, telling Microsoft that the company is probably violating antitrust laws by bundling Microsoft Internet Explorer with Windows. This seems like an odd issue to bring up now as there is increasing competition in the browser market. Firefox's marketshare has continued to climb. Google has entered the market with Chrome. Safari is gaining increasing life (in part due to the iPhone) and there are numerous other upstarts as well. The idea that Microsoft is somehow exerting undue influence on the browser market (a market that, for the most part, involves free software) seems rather odd. It seems to confirm the initial opinion that many had of the original antitrust lawsuit in the EU against Microsoft. It's more about a simple dislike for Microsoft than any actual antitrust violation.

Years ago, before the RIAA's decision to sue individual file sharers, the group used to send subpoenas to ISPs asking for IP addresses of users even though no lawsuit had actually been filed. Verizon actually stood up and fought the RIAA on this, eventually winning. In response, the RIAA started filing mass lawsuits, suing multiple "John Does" and then using those lawsuits to get subpoenas to the ISPs. Soon afterwards, a judge noticed that this seemed odd, and told the RIAA it needed to start filing individual lawsuits rather than bundling them all together. Unfortunately, other judges have allowed the "bundled" lawsuits, so the RIAA still files them. However, a magistrate judge in Maine is suggesting that the district court judge fine the RIAA lawyers for the practice, noting that the RIAA shows little explanation for why the lawsuits should be bundled.

It's been quite amusing recently to hear AT&T CEO Randall Stephenson's explanations for various AT&T policies lately. First there was that whole thing about how the company wasn't promoting its $10 DSL plan because "people didn't want it" and now we find out that the company that once claimed no one wanted naked DSL (perhaps because the company wouldn't offer it) is now admitting that actually people love naked DSL and hate bundles... except in order to get the "naked DSL" bundle they love so much, you have to bundle the service with a mobile phone. There's nothing wrong with offering bundles, certainly, but it seems reasonable to have a la carte offerings as well. In fact, Stephenson notes that forced bundling "is an old mind-set. We need to get over it." Yet, as Broadband Reports notes at the link above, it's a bit odd that he's saying forced bundling is an old mind-set, when he's promoting the similarly forced bundle -- where it's just mobile service rather than a landline phone service.