The Distribution of Pay Television in the United States: Let an Unshackled Marketplace Decide

5 Journal of International Media and Entertainment Law 1 (2014)

47 Pages Posted: 23 Aug 2013 Last revised: 5 May 2015

Date Written: February 26, 2014

Abstract

Aiming at what Senator John McCain has called an “injustice...inflicted on the American people,” antitrust litigation has taken aim at powerful television programmers who force large and unwieldy bundles of TV channels on distributors and the ultimate consumer, with overpayments that are tens of billions of dollars each year. The unwieldy and expensive bundles deny consumers meaningful choice and deter many from subscribing to pay TV. The paper focuses on one unsuccessful consumer class action suit dismissed in the lower courts, but also describes another pending suit brought against a programmer. An antitrust remedy could eliminate the bundling restraints, freeing the distributors to allow competition, not costly or intrusive regulation, to bring choice and lower cost options to television consumers. The article also analyzes commentary supportive of the dismissal of the earlier litigation, criticizing that commentary and arguing that a better outcome would have been consistent with the purposes of the Sherman Act and demonstrate the Act's continued relevance in a high tech world. The offered economic analysis is relevant not only to future antitrust litigation, but also to possible FCC regulatory action or proposed legislation pending in the Congress dealing with television distribution.

Keywords: Television distribution, the Sherman Act, Tying, price discrimination, economic analysis

JEL Classification: K21, L43, L82

Suggested Citation

Grimes, Warren S., The Distribution of Pay Television in the United States: Let an Unshackled Marketplace Decide (February 26, 2014). 5 Journal of International Media and Entertainment Law 1 (2014). Available at SSRN: https://ssrn.com/abstract=2313499

Warren S. Grimes (Contact Author)

Southwestern Law School ( email )

3050 Wilshire Blvd.
Los Angeles, CA 90010
United States

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