Antitrust Law Daily Wrap Up, TOP STORY—W.D. Ky.: Consumers failed to show that cable company tied service to cable box rentals, (Aug 5, 2014)

By Greg Hammond, J.D.

Cable consumers were unable to support their claims that Insight Communications Company, L.P. illegally tied its interactive premium cable (IPC) services to cable box rentals. In granting Insight’s motion for summary judgment, the federal district court in Louisville found that the group of consumers failed to produce sufficient evidence to create a genuine dispute on whether Insight violated Section 1 of the Sherman Act (Jarrett v. Insight Communications Company, L.P., July 29, 2014, McKinley, J.).

Background. IPC services provide two-way communication between cable subscribers and Insight, which allows for pay-per-view services, an interactive programming guide, and on-demand options. A group of consumers filed suit against the cable services company, asserting that its policy of requiring cable subscribers to rent cable boxes from Insight in order to receive Insight’s IPC services was an illegal tying scheme, restraining trade in violation of Section 1of the Sherman Act. Insight moved for summary judgment on the consumers’ third amended complaint.

Insufficient evidence. Contrary to the consumers’ argument that Insight’s policies require the rental of a set-top box from insight to receive IPC services, the court found that the company’s policies and practices actually allowed subscribers to use their own compatible and lawfully acquired set-top boxes. The court also determined that: (1) consumers failed to provide any evidence showing that Insight made leasing a set-top box from it the only economically viable option for its subscribers to obtain IPC services, as Insight charged less for the tying product alone than as part of a bundle; (2) the fact that 99 percent of subscribers rent a set-top box is not sufficient to create a material dispute of fact regarding coercion for a tying claim; (3) Insight was not obligated to publish or disseminate a written set-top box policy to consumers; (4) Insight was not required to establish a secondary market for set-top boxes by offering them for sale; and (5) the record demonstrated that customers successfully contacted Insight and received approval to use their own set-top boxes.

Consequently, the court concluded that there was insufficient evidence to create a genuine dispute on whether Insight violated the Sherman Act by forcing consumers to lease an Insight set-top box in order to receive the full benefit of the company’s IPC services. Insight’s motion for summary judgment was accordingly granted.

The case number is 3:09-CV-00093-JHM.

Attorneys: Adrienne W. Kim (Gray & White) for Laurie Jarrett. Craig A. Goldberg (Time Warner Cable, Inc.) and Laurence John Zielke for Insight Communications Co., L.P.

Companies: Insight Communications Co., L.P.

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