A California judge says Comcast (NASDAQ: CMCSA) must face allegations that it conspired to create a regional monopoly for one of its installation contractors in California.
In December, U.S. District Court Judge Troy L. Nunley rejected Comcast's bid to dismiss three conspiracy-related claims made against it by Clear Connection Corp. The Fresno, Calif.-based installer claims it had a preferred vendor contract with Comcast, but that the MSO squeezed it out, giving its Sacramento and Fresno business instead to another vendor, O.C. Communications.
Comcast reps had no comment for FierceInstaller. The case has been covered by Law360.
According to Clear Connection, Comcast ordered a realignment of its installation vendors in 2009, restricting the company to serving Comcast only in the Fresno area. The contractor said it followed this mandate, only to have Comcast end its deal with the company and give its Fresno business instead to O.C. Communications, which also serves Charter Communications (NASDAQ: CHTR) and Time Warner Cable (NYSE: TWC).
O.C. Communications ended up with Comcast contracts in Sacramento and Fresno.
Judge Nunley said Clear Connection's evidence supports its claim that Comcast used its overwhelming market share in the region to mandate a realignment plan that allowed it to create local monopolies for specific installers. Comcast used this method to control pricing, the judge added.
"Clear Connection explains its allegations that the realignment plan effectively constrained trade and dictated that only one contractor would service a territory," Judge Nunley said.
The judge also shot down Comcast's argument that merely choosing among its vendors does not amount to an antitrust violation.
"The court finds this argument to be an oversimplification [of Clear Connection's allegations] and reflective of Comcast's habit in these pleadings of arguing the facts it prefers rather than the facts that were asserted," Judge Nunley said.
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