U.S. Dist. Court, L.A., denied class action certification in anti...

that exclusivity agreements between MSOs and Excite@Home and Road Runner forced cable companies to impose condition on customers, plaintiffs sought unspecified damages and injunctive relief that would have imposed open access obligations on cable operators. Court’s denial of class certification was without prejudice, so plaintiffs could file amended compliant. In suit, Arthur Simon and John Galley said exclusivity agreements were contracts, combinations or conspiracies in restraint of trade, and bundling of transmission services with interface/content services constituted illegal tying arrangements in violation of Sherman Antitrust Act. As result of “illegal” tie, cable modem subscribers have been forced to pay “supracompetitive” prices and/or pay for unwanted service, they said. AT&T, Adelphia, Cablevision, Comcast, Cox, MediaOne and Time Warner head list of MSOs cited. Plaintiffs said issues that lent themselves to classwide action were: (1) Whether bundle of high-speed Internet transport and content services was one or 2 services. (2) Whether cable operators actually coerced customers to accept tie between 2. (3) Whether cable companies had market power. They said “injury in fact” could be proved on classwide basis. Cable companies said principal arguments in case related to market power. which varied greatly by region, precluding common proof. They also contended that variations in prices and terms argued against common proof of “injury of fact.” In denying class action certification, court said relevant geographic market was local cable franchise area because, in analyzing legality of tying arrangement, focus was on deal between seller and buyer rather than contract between sellers of tying and tied product. Competition in these markets clearly was relevant to whether cable companies had requisite market power to restrain trade and force their purchasers to buy unwanted product, court said. Court agreed with defendants that to prove injury, plaintiffs must produce evidence that prices would have been lower without tie. It ruled that common questions didn’t predominate for class action certification.