The Federal Trade Commission has given final approval to a consent agreement with Summit Communications Group, Inc. and seven Wometco Cable TV companies operating in Georgia (collectively referred to below as Wometco), settling charges that they illegally agreed to allocate between themselves the customers they would serve in the area of Cobb County, Georgia, where their local cable systems overlap. Allocation of customers deprives consumers of choices on quality and price made available through competition, the FTC said. The Commission's action makes the consent order provisions binding on the respondents.
Summit, based in Atlanta, Georgia, has been acquired by and is now a wholly-owned subsidiary of Time Warner Inc., which is based in New York City. Wometco was acquired by U S West, Inc. through its wholly-owned subsidiary, Multimedia Cable, Inc., in December 1994. The seven Wometco companies named as respondents in the case are Wometco Cable TV of Georgia, Inc., of Cobb County, Inc., of Clayton County, Inc., of Conyers Rockdale, Inc., of Fayette County, Inc., of Fulton County, and of Henry County, Inc. U S West is based in Englewood, Colorado.
The final order prohibits Summit and Wometco from engaging in similar illegal conduct to allocate or divide markets in the 14 counties where they offer cable service in Georgia. Specifically, it prohibits them from in any way agreeing, attempting to agree or carrying out an agreement with any cable television provider to allocate or divide markets, customers, contracts or territories for cable television service in Cobb, Bartow, Dekalb, Walton, Gwinnett, Fulton, Douglas, Fayette, Coweta, Clayton, Henry, Rockdale, Newton, and Cherokee counties. The settlement also prohibits such agreements or combinations to refrain from overbuilding any portion of any cable television system in these counties. The settlement also contains various reporting requirements to assist the FTC in monitoring the respondents' compliance.
The consent agreement was announced for public comment on July 12, and issued in final form on Oct. 20. The Commission vote on final issuance was 5-0, and two statements were issued. The Commission issued a statement in which it said that the unique circumstances of this case warrant limiting the proposed order to the 14 counties in Georgia where either of the two firms had operations. Wometco has been acquired by U S West, Inc. and Summit has been acquired by Time Warner Inc., so both are now under the control of major cable television firms not implicated in the FTC complaint, the Commission said. The proposed order prevents both of them from engaging in market allocation where either Summit or Wometco had operations, a far broader area than the small area in one county where the parties had cable systems capable of competing for business, the Commission said. Noting that this is an extraordinary case, the Commission then reiterated its general policy to seek the broadest possible relief in instances where it alleges there was per se illegal conduct.
In her statement, Commissioner Mary L. Azcuenaga said she dissented from the decision to geographically limit the cease and desist order. Noting that Summit operates cable TV systems outside the 14 counties, Azcuenaga stated that, "If, after the order is issued, Summit enters an identical market allocation agreement at a cable system outside these fourteen counties, the Commission's only recourse will be to initiate an administrative proceeding to obtain still another order." Azcuenaga also said that limiting the geographic scope of the order here "opens the door to unguided negotiations regarding the geographic scope of conduct orders."
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $10,000.
A news release summarizing the complaint and consent agreement was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release, the complaint and final order, and the two statements are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases, consumer brochures and other documents also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov
(FTC File No. 951 0024)
(Docket No. C-3623)