Sky Angel Alleges It Was Shot Down By C-SPAN Boycott

Online video distributor Sky Angel LLC has filed an antitrust complaint against C-SPAN in the U.S. District Court for the District of Columbia, accusing the news broadcaster of violating the antitrust laws by favoring traditional cable providers.

Unlike traditional cable companies, Sky Angel provides customers with a receiver box that uses an Internet connection to deliver more than 50 channels of “programs that are encouraging, inspiring, and rooted in Godly principles.”

According to the complaint in Sky Angel U.S. LLC v.  National Cable Satellite Corp., the National Cable Satellite Corp., doing business as C-SPAN, agreed to provide its programming through the Sky Angel service in 2009.  Sky Angel alleges that C-SPAN then reversed its decision for anticompetitive purposes and cut service to Sky Angel after only three days.  According to Sky Angel, C-SPAN’s Board of Directors, composed of executives from cable companies, caused C-SPAN to withhold its programming from Sky Angel, and to boycott Sky Angel.

Sky Angel is seeking damages against C-SPAN for violating the antitrust laws and an injunction that would require C-SPAN to honor the terms of its contract with Sky Angel for 10 years.

The lawsuit is Sky Angel’s second attempt at seeking antitrust remedies to increase competition in the online video distribution market.

In 2010, Discovery Communications denied Sky Angel access to both Discovery Channel and Animal Planet programming.  Sky Angel reacted by filed an access complaint with the Federal Communications Commission.

Although the FCC ruled against Sky Angel’s 2010 complaint, the FCC has expressed concern that traditional cable providers have a competitive advantage over alternative video distributors (such as Sky Angel).  “An entity attempting to enter the online video distribution marketplace must obtain a robust, if not comprehensive, programming library to offer consumers,” the FCC stated in a 2012 competition report.

Sky Angel has sought access to Discovery’s and potentially other programming based on its argument that it qualifies for program access as a “Multichannel Video Programming Distributor” (“MVPD”) under the Communications Act and the FCC’s rules.  The FCC has not granted Sky Angel such status, but on March 30 of this year, citing Sky Angel’s Discovery application, issued a Public Notice (Docket No. 12-83) requesting comment as to whether an Online Video Distributor of programming, such as Sky Angel, should be considered an MVPD.