Ad Seller Says Comcast Stymies Competition

CHICAGO (CN) — Comcast has unlawfully increased its monopoly over regional cable television advertising by restricting competitors' access to its infrastructure, a competitor claims in court.

Spot cable advertising is one way to buy advertising on cable television. It allows regional small-business owners to buy advertising on national cable networks that air in their local markets without buying airtime directly from the network.

Viamedia represents small and medium-sized cable television companies in the sale of spot cable advertising, an industry which generates over $5.4 billion in revenues.

Viamedia sued Comcast, and its subsidiary Comcast Spotlight in Illinois federal court on Monday for antitrust violations, claiming the telecom giant is squeezing out competition.

Comcast owns the NBC and Telemundo television networks and controls the spot cable advertising for over 35 million cable subscriber households — more than half of the entire industry — through representation agreements with other providers.

Regional advertisers buy ad time through "Interconnects," which are cooperatives of cable TV providers in a particular region.

"Through a series of acquisitions, Comcast has gained control of the Interconnects in 15 of the 25 most populous DMAs [designated market areas] (and 26 of the 50 most populous DMAs) in the United States. With that control, Comcast has undertaken to fundamentally and anticompetitively change how Interconnects operate by excluding competing third-party sales representatives like Viamedia and their clients from the Interconnects," the complaint says.

Last year, the U.S. Justice Department launched a formal investigation into whether Comcast has engaged in anticompetitive business practices, and the company faced questioning from Congress over restricting access to Interconnects prior to its failed attempt to acquire Time Warner Cable.

Viamedia claims, "Comcast has excluded Viamedia and its clients from the Interconnects in large DMAs, such as Chicago and Detroit, where Viamedia had previously participated in Interconnect sales for more than a decade. In other DMAs, Comcast has refused to allow Viamedia to participate in Comcast-controlled Interconnects for purposes of representing Viamedia's clients."

Comcast has also poached Viamedia clients, according to the complaint, by threatening to exclude them from Interconnects.

"Comcast has acted with the specific intent to monopolize the market for representing cable television service providers and with the specific intent to enable Comcast and Comcast Spotlight to control all Spot Cable Advertising sales in each of the DMAs where Comcast provides cable services," Viamedia says.

Viamedia seeks $225 million for unlawful monopolization, and other antitrust violations.

It is represented by Britt Miller with Mayer Brown in Chicago.

Comcast said in a statement, "We are currently reviewing the suit and generally do not comment on pending litigation."

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