MUMBAI: Heathrow based The America Channel (TAC), which is yet to start beaming, has sued cable conglomerates Time Warner Inc. and Comcast Corp. in an attempt block their $16.9 billion planned acquisition of bankrupt Adelphia Communications Corp.
A startup niche cable channel, TAC has filed the lawsuit because the two cable companies have allegedly refused to sign carriage deals with it.
In its lawsuit TAC claims that the deal violates federal antitrust laws and will reduce competition in the cable television industry.
Comcast and Time Warner last year jointly agreed to acquire Adelphia and divide its systems among the two of them.
The lawsuit accuses Time Warner and Comcast of scheming to monopolize local cable systems and of using their monopoly to refuse to deal with independent networks such as TAC, thus making it virtually impossible for unaffiliated networks to get access to cable subscribers.
The lawsuit also accuses the duo of price-fixing and bid-rigging in their submission of a joint bid instead of competing against each other to acquire Adelphia's assets.
A Time Warner spokesperson was quoted in a media report as saying, "The allegations in this complaint are entirely frivolous, and we are confident that this matter will not impede closing of the Adelphia transaction."
TAC attorney Joseph Alioto, on the other hand, said that the two big operators freeze out independent channels like TAC because the independents produce programmes that compete against their own offerings.
Alioto also said that besides seeking an injunction to block the Adelphia deal, TAC would also be seeking monetary compensation of around $1 billion.
TAC plans to launch late this year and reached an agreement in April with telecommunications company BT Americas that will make it available to 50 million homes in Europe and the Middle East with satellite TV.
The federal trade commission has already reviewed the case on anti-trust concerns. According to a media report, Alioto has asked for a jury trial and is hopeful of having the case heard before the deal is scheduled to be completed on 31 July.
As per the report, if the deal fails to close by 31 July, Comcast and Time Warner could walk away and perhaps collect a $440 million termination fee.
Founded in January 2003, TAC describes itself in the suit as "a new 24-hour, seven-day-a-week niche entertainment programming channel that explores and celebrates America in the 21st Century."
