C-SPAN Monopoly Claims Fail to Sway Judge

(CN) - The Christian-owned operator of a subscription television service cannot pursue antitrust claims against C-SPAN, a federal judge ruled.

In a November 2012 lawsuit, Sky Angel accused National Cable Satellite Corp. dba C-SPAN of trying to monopolize the market for real-time, multichannel video programming distribution services.

Sky Angel operates FAVE-TV, a subscription service that distributes "faith-based" and "family-oriented" video programming. Though C-SPAN agreed to let Sky Angel broadcast its legislative programming in 2009, C-SPAN shut off the feed just three days in.

Claiming that C-SPAN never revealed why it terminated the deal, Sky Angel sought a 10-year programming license with the nonprofit, alleging that it had been harmed by a group boycott in violation of the Sherman Antitrust Act.

C-SPAN explained to the Washington court that it had agreed to let Sky Angel carry its networks on a protected Internet-protocol-based stream but found that Sky Angel's distribution technology would breach that deal since it includes public Internet.

U.S. District Judge Rudolph Contreras rejected C-SPAN's claims that the Federal Communications Commission retains exclusive jurisdiction over Sky Angel's claims, but he dismissed the suit without prejudice Monday for failure to state a claim.

Sky Angel's group boycott claim fails because the Florida-based company did not plead the requisite "concerted activity," as required by Section 1 of the Sherman Act, according to the ruling.

For this claim, Sky Angel had said that the largest multichannel video programming distributors (MVPDs) of the cable industry control C-SPAN. It also claimed that the top 10 largest MVPDS hold seats on C-SPAN's board of directors.

"But merely pleading that multiple entities hold positions on a board of directors does not establish a horizontal agreement for purposes of Section 1," Contreras wrote. "Because Sky Angel does not provide any factual context for the cable MVPD board members' alleged agreement, the court will dismiss Count I without prejudice."

The court likewise nixed Sky Angel's claim that C-SPAN maintains a monopoly in violation of Section 2 of the Sherman Act.

This claim fails because "Sky Angel must provide more detail about the geographic scale on which competition actually occurs," Contreras wrote.

C-SPAN meanwhile showed that the complaint must prove it has monopoly power.

"The court sees no plausible inference from the pleaded facts that a single entity wields or threatens to attain monopoly power over the alleged relevant market (both components of which are inadequately pleaded)," Contreras wrote (emphases and parentheses in original). "Indeed, the complaint is premised on the alleged collective action of several cable MVPDs within a single, national market."

In a silver lining for the case, Contreras found it plausible that the lack of C-SPAN programming hurt Sky Angel's profits and reputation, among other injuries.

"Although Sky Angel's two Sherman Act claims are inadequately pleaded, the court finds that, if such violations did occur, the complaint sufficiently alleges injury in fact and antitrust injury at this stage," the ruling concludes.

Sky Angel can try to address these deficiencies with an amended complaint, the court said.

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