DirecTV Claims Unfair Practices by iN Demand

[Gregg Lengling]

DirecTV said Wednesday it has filed a complaint with the Federal Communications Commission charging that iN Demand, a pay-per-view and video-on-demand service owned by three cable companies, engages in unfair pricing practices designed to favor cable providers over satellite companies.
The No. 1 satellite company said in its complaint that iN Demand's pricing model for its high-definition programming would force DirecTV to pay three to four times what Comcast and Time Warner Cable pay for the same service. iN Demand is owned by Comcast, Time Warner and Cox Communications.

DirecTV asks that the FCC find that iN Demand's pricing scheme violates the Communications Act and FCC rules and is asking the agency to force iN Demand to offer the high-definition service to DirecTV under the same rates, terms and conditions offered to cable companies.

DirecTV officials said the pricing structure for the high-definition service breaks with the industry standard of setting rates based on the number of subscribers who can receive the service. Instead, DirecTV said, iN Demand's pricing is based on the total number of digital customers, not the number of subscribers who get iN Demand's hi-def service.

"This is not accidental," said Dan Fawcett, DirecTV's executive VP of business and legal affairs. "It is a deliberate strategy by iN Demand to favor its cable owners over its satellite competitors and achieve its goal of keeping [the high-definition service] only on cable, as its advertising tagline suggests."

iN Demand dismissed DirecTV's charges and maintained that its pricing structure operates well within the FCC guidelines.

"We have had numerous discussions with DirecTV about carriage of our high-definition networks INHD and INHD2, and we believe that the allegations in the company's complaint are completely without merit," iN Demand said in a statement. "We have always been, and remain, willing to negotiate carriage with any distributor. Our pricing policies are in full compliance with FCC rules and regulations and we're confident that the FCC will find in our favor."