Page 177 - Communication Commerce and Power The Political Economy of America and the Direct Broadcast Satellite

Capital, Technology and the US in an 'Open Market' 167

General Electric (GE) satellite subsidiary GE American Communica-
tions (GE Americom). In 1992, following the initiation of a federal
Department of Justice antitrust investigation, the New York State
Attorney General charged these companies ('Primestar Partners LP')
with a number of illegal activities. According to the Official Com-
plaint, 'the nation's largest cable system operators ... by their con-
duct, monopolized, attempted to monopolize, combined and
conspired to monopolize and restrained trade in the delivery of multi-
channel subscription television programming to consumers. ' 24
The Complaint argues that due to the size of the companies that
constitute Primestar and the large number of cable systems they
control, their collective ability to purchase or control programing
involved a conscious and successful effort to 'restrict actual or poten-
tial competitors access to programming services necessary to com-
pete.'25 The New York Attorney General claims that the country's
most successful programers - including HBO, Showtime, Cinemax
and MTV- were not made available to prospective US DBS oper-
ators in order to restrict their ability to compete with existing cable
systems.2 The Complaint explains that
6
Commencing sometime in or before 1986, ... and continuing to the
present, the defendant MSOs [cable companies] and their co-
conspirators have engaged in a continuing contract, combination
or conspiracy in unreasonable restraint of trade in an effort to
suppress and eliminate DBS competition in the delivery of
multichannel subscription television programming to consumers. 27

These cable companies also were accused of acquiring control of
GE Americom's K-1 satellite in 1990- then the only North American
system readily capable of providing a DBS service - 'in order to
reduce the potential for direct competition' with prospective DBS
companies and among one another's cable operations. In December
28
1990, when the K-Prime partnership was reformulated and re-named
Primestar, an agreement was made with the FCC DBS applicant
Tempo Satellite (owned by TCI) to transfer the medium-power Pri-
mestar service onto Tempo's prospective high power DBS. 'The
efforts ... to acquire Tempo and other high-power DBS applicants,'
states the Complaint, were explicitly designed 'to eliminate potential
competitors. ' 29
In or before 1985., when Hughes Communications began to formu-
late its DirecTV DBS service, its officials attempted to contract