• Corrupt “Cable Trust” Costs Customers Billions

    by  • June 4, 2013 • Cable Choice • 0 Comments

    A law professor who filed an anti-trust lawsuit against the cable industry says that the cable “trust” overcharges pay-TV customers – to the tune of $34 billion a year.

    In 2007, Professor Warren Grimes, a professor of law at  Southwestern Law School, served as legal consultant to a group of cable subscribers who filed an class action anti-trust lawsuit against the entertainment conglomerate. The suit said that, by selling their networks in “bundles,” the entertainment industry forces cable companies to carry all their unpopular networks, and sell them to consumers in the same “bundles” – thus forcing the end customer to pay for hundreds of channels they don’t want, just to get a few they do.

    That lawsuit was dismissed because the judges illogically said that, even though consumers are being hurt, there is no proof that there’s harm to competition between cable companies. This ruling misses the entire point of anti-trust legislation, which is to protect customers, not the corporation. Now, in a recent article, Professor Grimes argues that the court’s ruling completely ignores the fundamental goal of the 1890 Sherman Anti-Trust Act.

    Furthermore, the professor says that American pay-TV subscribers are being overcharged to the tune of $34 billion every year. In Canada, where customers are allowed to buy smaller packages which fit their needs, each customer pays $342 less than Americans on average. ($342 x 100 million U.S. cable subscribers = $34 billion)

    With fat-cat millionaire owners and billions in overcharges every year, maybe it really IS time for a new Teddy Roosevelt to “bust the cable trust.”

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    About

    Christopher Gildemeister is the PTC’s Head of Research Operations. He began as an Entertainment Analyst at the PTC in 2005. From 2007-2016, he was Senior Writer/Editor, responsible for communicating the PTC’s message to the public through newsletters, columns, and the PTC Watchdog blog. Dr. Gildemeister holds a Ph.D. from The Catholic University of America.

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