2nd Circuit Upholds TWC Set-Top Decision, Ruling 2-1
The 2nd U.S. Circuit Court of Appeals upheld a lower court decision to throw out a lawsuit alleging Time Warner Cable tied some services to leasing of a set-top box. The three-judge panel was split, with Judges Ralph Winter and…
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Denny Chin in their decision (in Pacer) saying the plaintiffs failed to prove the set-tops and the premium programming they transmit are separate products under antitrust law and that TWC had enough market power to force an illegal tie-in. In a dissent (in Pacer), Judge Christopher Droney said the plaintiffs made a plausible case that set-tops and premium cable service constitute separate products in the eyes of consumers because even if subscribers were able to buy cable boxes directly from the manufacturer, TWC wouldn't allow them to receive premium cable service without leasing one from it. "The FCC’s failed efforts to disaggregate set-top cable boxes from cable services reinforce, rather than undermine, Plaintiffs’ claim," Droney said, saying FCC efforts to create an alternative to set-tops shows the agency sees the boxes and cable service as distinct products. The judge said he disagreed with the majority when they concluded the plaintiffs conflated the markets for basic and premium cable service, and while the plaintiff allegations are based largely on nationwide data for basic services, those numbers are relevant to TWC premium market share as well. Charter Communications now owns TWC. Charter didn't comment. Class-action lawyer Michael Pospisil of Edgar Law Firm, who represented the plaintiffs, said they're disappointed by the verdict and "looking at all options.”