A federal judge rejected Viacom's motion to dismiss an antitrust lawsuit filed by Cablevision, which is trying to end Viacom's practice of imposing a financial "penalty" on companies that try to distribute its most popular channels without also licensing its less desirable ones.

Cablevision has "pleaded facts sufficient to support plausibly an inference of anticompetitive effects," US District Judge Laura Taylor Swain wrote Friday (PDF). Cablevision filed the lawsuit in February 2013 in New York. Viacom argued in its motion for dismissal that, among other things, Cablevision failed to allege anticompetitive effects but was unable to convince the judge.

Swain described the case as follows:

Cablevision entered into a licensing agreement with Viacom in 2012. In the negotiations, Viacom required Cablevision to license a dozen less popular programing networks (termed “Suite Networks” in the Complaint) in order to gain license rights to what Cablevision alleges are “four commercially critical” programming networks, which Cablevision terms “Core Networks.” Cablevision alleges that Viacom threatened it with a substantial financial “penalty” for declining to purchase the licenses for, and distribute, the Suite Networks along with the Core Networks. Cablevision further alleges that the channels on which it is able to offer programming are limited and that, were it to be able to forego the Suite Networks, it would seek out programming from other suppliers.

The "four commercially critical" networks were BET, Comedy Central, MTV, and Nickelodeon. The less popular ones are Centric, CMT, CMT Pure Country, Logo, MTV Hits, MTV Jams, Nick Jr., Nick 2, Nicktoons, Palladia, Teen Nick, Tr3s, VH1 Classic, and VH1 Soul. The money at stake was nearly a billion dollars at minimum, with the exact amount redacted from Cablevision's complaint:

While Swain denied Viacom's motion to dismiss the suit, she did not rule on Cablevision's request to void its licensing agreement with Viacom and to prohibit Viacom from conditioning the licensing of its core networks on licensing of the less popular ones. It's too early in the litigation to resolve that question, she wrote.