Viamedia, Inc. v. Comcast Corp.
Viamedia, Inc. v. Comcast Corp.
Opinion of the Court
This antitrust suit was born when a monopolist in one market decided not to do business with a competitor from a related market. The monopolist, Comcast Corporation, denied its competitor, Viamedia, Inc., access (or access on terms Viamedia considered reasonable) to much-needed sales platforms called interconnects. Hurting as it lost revenue and customers turned to Comcast, Viamedia sued under Section 2 of the Sherman Act and various state antitrust laws. See Compl., R. 1; Am. Compl., R. 40.
At the motion-to-dismiss stage, the Court ruled that Comcast had no antitrust duty to deal with Viamedia and thus its refusal to deal was not cognizably anticompetitive under Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP ,
Before the Court are Comcast's motion for summary judgment (R. 264), motion to exclude opinions proffered by Viamedia, Inc.'s damages expert, Thomas Lys, Ph.D. (R. 212), and motion to exclude certain opinions proffered by Viamedia's liability expert, Harold Furchtgott-Roth (R. 208). For the reasons explained below, the Court grants Comcast's motion for summary judgment, grants in part Comcast's motion to exclude Dr. Furchtgott-Roth's opinions and denies the remainder as moot, grants Comcast's motion to exclude Dr. Lys's opinions, and enters judgment in Comcast's favor.
*1043BACKGROUND
I. Factual Background
Northern District of Illinois Local Rule 56.1 frames how district courts receive facts at the summary-judgment stage. See Delapaz v. Richardson ,
The purpose of Local Rule 56.1 statements and responses is to identify the relevant admissible evidence supporting the material facts, not to make factual or legal arguments. Cady v. Sheahan ,
A. The Spot Cable Business and Interconnects
Cable networks, like ESPN or CNN, typically allocate small windows of air *1044time-two to three minutes per hour-to the multichannel video programming distributors ("MVPDs") that show their programming. CSF ¶ 7.
There are many MVPDs nationwide, including Comcast, RCN Corporation, Wide Open West ("WOW!"), Charter Communications, Inc., Atlantic Broadband, and Verizon Communications. MVPDs come in different forms-cable operators, like Comcast or Charter; telecom providers, like Verizon and AT & T; overbuilders, like WOW! and RCN; and satellite providers, like DISH or DirectTV. Id. ¶ 8. Most MVPDs offer their services in one or more metropolitan regions, called designated market areas ("DMAs"). Id. ¶ 5. There are typically four or more MVPDs in a DMA. Comcast Ex. 2, Furchtgott-Roth Report ¶ 17 (R. 273-5).
In any given DMA, there are different ways in which MVPDs sell avails to advertisers. Some MVPDs sell directly through their own sales force. CSF ¶ 10. Others hire advertising-representation firms that specialize in spot cable advertising ("Ad Reps"). Id. ¶ 11. Viamedia is such an Ad Rep, and it has no corporate affiliation with any MVPD. Id. ¶ 13. Viamedia, in fact, is the only independent Ad Rep with significant market presence. VSF ¶ 9.
When an MVPD hires an Ad Rep, the two typically enter into an "advertising purchase and sale" agreement. Id. ¶ 11. Under these agreements, an Ad Rep is responsible for managing and selling an MVPDs' avail inventory (or some portion of it) to advertisers. Id. ¶¶ 11-12; VSF ¶ 1. Ad Reps can represent their MVPD customers: (1) locally, selling only a part of an MVPD's avails in a DMA to local advertisers; (2) regionally, selling all of the MVPD's avails in a DMA; or (3) nationally. Furchtgott-Roth Report ¶ 21. In any event, Ad Reps' sales responsibilities entail ancillary responsibilities, too, including: marketing and pricing the avails; maintaining the software and hardware needed to run, insert, traffic, monitor and advertise spot cable ads; organizing inventory into schedules and ensuring each ad runs correctly during those schedules; and performing financial services, like accounting, billing, and collection. VSF ¶ 1. Ad Reps are also responsible for working with interconnects to sell avails. Id. These services make up "Ad Rep Services," according *1045to Viamedia. Id. ; see also Furchtgott-Roth Report ¶¶ 22-29.
An interconnect is a "one stop shop" where advertisers can purchase spot cable ads on a DMA-wide basis. CSF ¶ 16. Developed by MVPDs in the 1990s, interconnects solve a market inefficiency. Before interconnects, an advertiser wanting to reach television audiences with commercials running at the same time on the same channel across the DMA had to either rely on over-the-air broadcast stations exclusively or negotiate separately with each MVPD. CSF ¶¶ 14-15, Resp. to ¶ 14. An interconnect-of which there is one per DMA-fixes that problem by pooling together avails among the DMAs' MVPDs, scheduling allocations, selling and coordinating the sale of those avails, and billing the parties. Id. ¶ 17, Resp. to ¶ 17. These collective services make up "Interconnect Services," according to Viamedia. Id. ; see also Furchtgott-Roth Report ¶¶ 30-42.
Over the last decade or so, the largest MVPD in a DMA has come to operate that DMA's interconnect. Id. ¶ 18; see also Am. Compl. ¶¶ 13, 44. In operating the interconnect, the controlling MVPD makes investments to support and maintain the platform. The degree and nature of those investments are disputed, but, at a minimum, MVPDs invest in and maintain a sales infrastructure for the interconnects. CSF ¶ 20, Resp. to ¶ 20; see also Comcast Ex. 14 at 147:11-14 ("David Solomon, Viamedia's Chief Revenue Officer, testifying that, "I'm sure [Comcast] ha[s] over the past 18 years ... spent significant [sic] to establish support, build and maintain their infrastructure" over the interconnects").
Ad Reps, pursuant to the purchase and sale agreements, profit from the sale of MVPDs' avails based on an agreed revenue share, or split, with the MVPD. CSF ¶ 38. The split is the percentage division of the revenue generated from the avails' sales, with a share going to the Ad Rep and the remainder to the MVPD. Id. A higher split share for the Ad Rep means a worse price for the Ad Rep's services to the MVPD, and vice versa. Id. ¶ 39. Also important, of course, is the amount of revenue generated-an MVPD could concede a less favorable split if it thought that the Ad Rep would be able to generate more revenue. Id. , Resp. to ¶¶ 38, 39. Ad Reps also sometimes provide MVPDs with minimum-revenue guarantees. Id. ¶ 40. Revenue splits and guarantees are "critical points of competition" between Ad Rep firms vying for MVPD business. Id. ¶ 41.
As to other terms of Ad Rep-MVPD agreements, the industry standard is exclusive, region-wide, full-turnkey representation. CSF ¶¶ 25-27. In a full-turnkey representation, the MVPD sells all of its avails in one or more DMA (absent the portion it wants to retain for self-advertising) to a single Ad Rep. Id. The Ad Rep then enjoys the "exclusive right to manage and sell" the avails. Id. ¶ 27; VSF ¶ 2. This arrangement offers "one stop shopping" for both MVDPs and Ad Reps. CSF ¶ 28. Full-turnkey representation comes with other services, too; Viamedia, for example, assists MVPDs with their branding efforts, product promotions, and technical problems. VSF ¶ 6.
Though the most prominent, full-turnkey is not the only form of Ad Rep Services. Some MVPD customers hire Ad Reps to represent them locally, and sign over only a portion of their avails in a DMA. E.g. , Furchtgott-Roth Report ¶¶ 24-25; see also id. ¶ 53 ("Spot Cable Ad Rep Services and Interconnect Services are separate products regardless of whether Spot Cable Ad Rep Services are provided on a full turnkey basis"). Other MVPDs may self-provide Ad Rep Services. Furchtgott-Roth Report ¶¶ 24-25.
*1046Interconnect operators can also work directly with an MVPD customer to sell a portion of the MVPD's avails without a third-party Ad Rep. See id. ¶ 53; CSF ¶ 29. This arrangement is called an "interconnect-only" agreement. CSF ¶ 30. In such an agreement, the MVPD sells a portion of its avails to the interconnect operator for sale on a DMA-wide basis. Id. ¶ 29. Interconnect-only agreements allow interconnect operators to provide Interconnect Services directly to MVPDs. VSF ¶ 67. To sell the remaining avails on a local (i.e. , not regional or DMA-wide) basis, MVPDs with an interconnect-only agreement may sell their own avails or hire an Ad Rep for "local-only" agreements. CSF ¶¶ 29, 31, 33, 126; see also VSF ¶ 67. Verizon and Frontier, Verizon's successor in certain DMAs, have previously opted for this arrangement in some DMAs. CSF ¶¶ 32-37. For its part, Comcast has been willing to enter into interconnect-only agreements; since December 2011, 14 percent of Comcast's agreements with MVPDs have been interconnect-only. Id. ¶ 129. Comcast entered into its most recent interconnect-only deal in September 2016. Id. ¶ 125; Comcast Ex. 58.
B. Comcast's Competition with Viamedia and Control of the Interconnects
Viamedia and Comcast compete as Ad Reps for business from MVPD clients in many DMAs. VSF ¶ 9. The record reflects that both have respective advantages. Comcast, as a large MVPD, and in some DMAs the largest (and therefore the operator of the interconnect), requires less incremental operation expenses to represent fellow MVPDs. CSF ¶ 115; Comcast Ex. 96 at 16 (internal Viamedia presentation stating "Viamedia can not [sic] compete economically within the footprint of a major cable company"); see also Comcast Ex. 18 at 93:5-19. Particularly relevant here, Comcast operates the interconnects in Chicago, Detroit, and Hartford, Connecticut. Id. ¶ 10. At the same time, some MVPDs have expressed that "all things being equal" they would prefer that a competitor, like Comcast, not represent them. VSF ¶ 7; Viamedia Ex. 69 at 8 ("RCN is not comfortable having its largest and most formidable rival as its representative in the spot cable market"). This benefits an unaffiliated Ad Rep, like Viamedia. Id. Viamedia's former Chief Financial Officer, Christopher Black, has also testified that Viamedia had "[l]ong term relationships with ... certain MVPDs" and provided strong customer service. Id. ¶¶ 6, 8; Viamedia Ex. 8. Both Viamedia and Comcast pursue full-turnkey relationships with their MVPD clients, Id. ¶ 55; VSF ¶ 7, although, as noted, Comcast has entered into interconnect-only agreements with some frequency.
Ad Reps require interconnect "access" to compete effectively for MVPDs' business because of the substantial amount of advertising revenue interconnects generate. Am. Compl. ¶ 73; CSF ¶ 111; VSF ¶ 20. The parties engage in a semantic debate about whether Ad Reps access interconnects "on behalf" of their MVPD clients, and whether the MVPD clients "feel" as though they participate in the interconnects, but the economic facts of the transaction are straightforward. For an Ad Rep to obtain access, the interconnect operator contracts with the Ad Rep to acquire a portion of ad inventory from the Ad Rep, which the Ad Rep has already acquired responsibility for selling from its MVPD-client. See CSF ¶ 42; Comcast Ex. 34. The interconnect operator then arranges for the sale of those avails on the interconnect, and distributes proceeds to the Ad Rep accordingly. Id.
This was the agreement Comcast and Viamedia entered into in 2003. Id. ¶¶ 42-43.
*1047Pursuant to that agreement, Comcast had the exclusive right to sell through its Chicago and Detroit interconnects a portion of an ad inventory for which Viamedia had acquired responsibility from two of its clients, RCN and WOW!. Id. ¶ 43. Viamedia's representations of RCN and WOW! were, as is typical, exclusive and full-turnkey, meaning that RCN and WOW! could not resell their avails through another third party in the Chicago and Detroit DMAs. Id. ¶¶ 44, 49. Viamedia's exclusive relationship with RCN was to expire at the end of 2015, and its exclusive relationship with WOW! was to expire at the end of 2014. CSF ¶¶ 88, 96; VSF ¶¶ 26, 32. Further, the 2003 agreement contained a non-solicitation clause, which prohibited Comcast from contacting RCN or WOW! for certain periods. CSF ¶ 45. The 2003 agreement between Comcast and Viamedia contemplated an expiration date of May 31, 2012. Id. ¶ 46.
Months before that expiration date, in December 2011, Comcast notified Viamedia that it would not be renewing the agreement. VSF ¶ 15; CSF ¶ 47. As a result, from June 2012 until the expiration of Viamedia's exclusive contracts with RCN and WOW!, Viamedia, RCN, and WOW! lost out on revenue they may have made if Viamedia could have continued to use Comcast's interconnects. See VSF ¶ 17.
Comcast did not renew its contract with Viamedia so that it could pursue full-turnkey relationships with RCN and WOW!. Id. ¶ 15. According to Comcast, it "prefers to do direct deals with MVPDs rather than intermediaries like Viamedia." CSF ¶ 48. Put another way, Comcast's strategy, starting in 2011, was "to get" MVPDs to employ Comcast on a full-turnkey basis. VSF ¶ 15; Viamedia Ex. 57; see also, e.g. , Viamedia Ex. 53 (citing Comcast's "[r]ealigned business strategy for 2012 and beyond with non-renewal of Viamedia contract for allowing for full turnkey opportunities into the future."). To that end, Comcast stopped contracting "with 'middlemen' media firms, such a Viamedia." Viamedia Ex. 69 at 9. One Comcast executive explained: "Working through a middleman, intermediary, like Viamedia really brought no value to the table other than their contract with their respective MVPDs," and so the company looked to deal directly with the MVPDs. Viamedia Ex. 21 at 167.
Whatever Comcast's motivations, its strategy and Viamedia's resultant inability to access the interconnects in Chicago and Detroit cost Viamedia, RCN, and WOW! "millions of dollars in revenue" between June 2012 and 2015. VSF ¶ 23. This came as no surprise to Comcast. In 2011, it knew that Viamedia had the exclusive right to sell all of WOW! and RCN's avails in Chicago and Detroit "for several years into the future," VSF ¶ 14, and it conducted an internal analysis that projected that its decision to not renew with Viamedia would negatively impact Comcast Spotlight, Viamedia, RCN, and WOW! in 2012, id. ¶ 16. In addition to Chicago and Detroit, Comcast has denied Viamedia's request to enter into an interconnect agreement with it in the Hartford DMA, where Viamedia represents Frontier. Id. ¶ 18.
In 2014, however, Comcast and Viamedia began negotiating a contract to permit Viamedia access to the Chicago, Detroit, and Hartford interconnects. Id. , Resp. to ¶ 18. WOW! even got involved, and directly requested that Comcast allow its avails (still contracted to Viamedia) to be sold on the interconnects "immediately." See VSF ¶ 19.
C. Viamedia's Subsequent Lost Business
From 2011, when Comcast notified Viamedia that it would not renew their interconnect agreement in Chicago and Detroit, until 2016, when Viamedia filed this lawsuit, Viamedia operated in 90 DMAs representing at least nine MVPDs. CSF ¶¶ 54, 57. In that period, Viamedia bid for and lost several MVPD clients-and it attributes many of those losses, and others, to Comcast's conduct in Chicago, Detroit, and Hartford.
1. RCN
Up until 2015, Viamedia was RCN's only Ad Rep nationwide. VSF ¶ 32. In 2014, RCN and Viamedia began to negotiate renewing their full-turnkey agreements. CSF ¶ 96. During negotiations, Viamedia "stepped back its guarantees" and gave a "less favorable" offer in November of that year, which caused RCN to react negatively. CSF ¶ 97. RCN then, and for apparently the first time in its relationship with Viamedia, requested Viamedia's financials, which showed that the company was suffering. VSF ¶ 33. According to Viamedia, without interconnect access in Chicago and Detroit, it was "unable to make a competitive financial offer." Id. ¶ 33. RCN requested a bid for exclusive, full-turnkey services from Comcast in 2015. CSF ¶ 99. It never sought from Comcast an interconnect-only agreement. See id. Comcast ultimately offered superior terms, which, as a former RCN executive testified, made the offers "nowhere near equal" and a "not [ ] very difficult decision" for RCN to make. Id. ¶ 100. It selected Comcast as its full-turnkey Ad Rep, knowing that its decision could result in Viamedia exiting the Chicago DMA market. Id. ¶ 103.
RCN understood that it could not have its avails sold on Comcast-operated interconnects if it sought to do so through a third-party Ad Rep, like Viamedia. Id. , Resp. to ¶ 104; see also VSF ¶ 19. RCN wrote to the Federal Communications Commission during Comcast's proposed merger with Times Warner Cable ("TWC"), and explained that Comcast "limit[s] access to the interconnects to those firms [i.e. , MVPDs] that eschew the use of Viamedia and other third party representatives." Viamedia Ex. 69. It cited Comcast's policy, that it "does not typically contract with 'middlemen' media firms, such as Viamedia." Id.
2. WOW!
WOW! and Viamedia's relationship began in 2001. VSF ¶ 26. As of 2015, and after several contract renewals, Viamedia represented WOW! in 12 DMAs. Id. Expecting its contract with WOW! to expire at the end of 2014, WOW! solicited bids from Viamedia and Comcast in October 2013. CSF ¶ 88. WOW! selected Viamedia, but only for a year-to the end of 2015. Id. ¶ 89. In 2015, WOW! issued another bid to Comcast and Viamedia seeking proposals for exclusive, full-turnkey representation in eight DMAs, including Chicago and Detroit. Id. ¶ 90. WOW!, like RCN, never requested an interconnect-only deal from Comcast. See id. By the 2015 request for *1049bids, WOW! was "very unhappy" that Viamedia had not been able to sell its avails on the Chicago and Detroit interconnects. VSF ¶ 27. Comcast again offered better financial terms to represent WOW! in the Chicago and Detroit DMAs, and WOW! selected Comcast in those regions. CSF ¶¶ 91, 92. In so doing, WOW! recognized that its decision could force Viamedia out of the Chicago and Detroit regions. Id. ¶ 94. WOW!, however, selected Viamedia to represent it in other DMAs, like Columbus, Cleveland, and Tampa. VSF ¶ 29.
WOW! valued having its avails sold on the interconnects and the resulting substantial revenue. Id. ¶ 28. WOW!, like RCN, understood that if it wanted its avails sold on the Comcast-operated interconnects in Chicago and Detroit, it would need to directly contract with Comcast-it could not do so through Viamedia. Id. In weighing Viamedia and Comcast, for example, WOW! listed Comcast's interconnect access as a "pro" and Viamedia's lack thereof as a "con." Viamedia Ex. 68. Internal WOW! emails similarly reflect that the company believed it needed to have a "rep agreement" with Comcast to have its avails sold on the interconnects. CSF ¶ 95, Resp. to ¶ 95.
3. Verizon
In 2006, Viamedia and Verizon entered into a full-turnkey representation agreement for nine DMAs. CSF ¶ 58. In 2009, the parties extended the agreement through December 2013, but contracted to allow for Verizon to "negotiate for the sale of regional and/or national Commercial Advertising in any Other Market by means of an 'interconnect' in such DMA," including Dallas, Los Angeles, and New York. Id. ¶ 59. In May 2010, Verizon and TWC entered into an agreement, pursuant to which TWC purchased 40 percent of Verizon's avails in Dallas, Los Angeles, and New York-where TWC operated the interconnects-for sale on TWC's interconnects. Id. ¶ 60. That agreement contained a "Local Business Option." If TWC met certain performance metrics in 2011 and 2012, it could "elect to present Verizon's local advertising sales business" beginning in 2014. Id. ¶ 61.
In January 2013, pursuant to the Verizon-TWC contract, TWC notified Verizon that it was contemplating exercising the Local Business Option and attached its performance-metric calculations. Id. ¶ 62. Verizon responded on February 15, 2015, with a metrics report. Under the original TWC-Verizon contract, TWC had until March 15, 2013, or 30 days after receipt of the metrics report to exercise its Local Business Option. VSF ¶ 50. On March 15, 2013, however, the parties amended the agreement and extended the date by which TWC could exercise the Local Business Option to April 5, 2013. VSF ¶ 50, Resp. to ¶ 50. TWC exercised the Local Business Option on that day. Id. ¶ 50. Verizon then replaced Viamedia with TWC in those DMAs. See CSF ¶ 65. Further, and also in 2013, Verizon informed Viamedia that it had selected other Ad Reps-including Bright House, Cox, and Comcast-to represent it in several respective DMAs. VSF ¶ 47, Resp. to ¶ 47.
Before then, Verizon and Viamedia had started to negotiate for Viamedia's continued representation after 2013. Id. ¶ 50. During those negotiations, Verizon expressed concerns about Viamedia's fiscal health. Id. ¶ 50. In each DMA that Viamedia lost Verizon's business, it failed to match the terms offered by the competing Ad Reps. CSF ¶ 69.
4. Frontier
Viamedia has been an Ad Rep for Frontier since 2010. VSF ¶ 37. In 2014, Frontier acquired AT & T's MVPD system in Hartford. CSF ¶ 71. Comcast, which operates the Hartford interconnect, had previously *1050represented AT & T on a full-turnkey basis, and, under that agreement, any successor (like Frontier) had the right to assume Comcast's Ad Rep agreement. Id. ¶ 72. Frontier instead entered into an exclusive, full-turnkey agreement with Viamedia for the Hartford DMA, set to expire at the end of 2018. Id. ¶ 73; VSF ¶ 37. Comcast, however, has refused to enter into an agreement with Viamedia to allow for the sale of Frontier's avails on the Hartford interconnect. Id. ¶ 39. As a result, Viamedia and Frontier have not benefited from those potential sales, and Frontier's revenues fell below the baselines guaranteed by Viamedia in 2015 and 2016. Id. ¶ 41.
Outside of Hartford, Viamedia bid for Frontier's business in Los Angeles and Dallas (where Comcast does not run the interconnects). CSF ¶ 77. Frontier rejected Viamedia's offer because it fell "significantly below market value." Id. ¶ 78. Viamedia also lost Frontier's business in Tampa (where Comcast also does not control the interconnects) to Bright House. Id. ¶ 79.
5. Atlantic Broadband
In 2014, Atlantic Broadband sought bids from Comcast and Viamedia for exclusive, full-turnkey representation in seven DMAs (none of which was Chicago, Detroit, or Hartford). Id. ¶ 82. At the time, Comcast already represented Atlantic Broadband in each DMA; Viamedia had never represented Broadband. Id. ¶¶ 84-85. Comcast offered Atlantic Broadband terms "superior" to Viamedia. Id. ¶ 86. Atlantic Broadband chose Comcast. Id. ¶ 87. Viamedia, however, believes that it was "well positioned" to compete for Atlantic Broadband's business, and could have offered better terms and a more substantial guarantee if it had been allowed access to Comcast-controlled interconnects. VSF ¶¶ 51, 53.
6. Other Claimed Losses
Viamedia also claims that Comcast's refusal to allow its acquired avails to be sold on the Chicago, Detroit, and Hartford interconnects has harmed it in a bevy of ways. The refusal, according to Viamedia, has forced it to negotiate debt amendments, and incur bank and legal fees. Id. ¶ 54. In addition, it has had to pay certain personnel expenses, like "retention bonuses and severance payments," as well as wasteful fixed expenses, like "rent on unused office space in Chicago." Id. In 2012, Viamedia generated $212 million in revenue and had $23.5 million in EBITA annually, plus 460 employees who worked for 32 MVPD partners covering 4.7 million subscribers in 57 DMAs. Id. ¶ 56. Since 2012, however, Viamedia claims to have lost millions of investment dollars, its good reputation, talented employees, and the ability to renew or obtain new contracts with MVPD partners. Id. ¶ 57.
II. Procedural Background
Out of that factual backdrop, Viamedia filed this lawsuit on May 23, 2016. Viamedia brings claims of monopolization and attempted monopolization by Comcast in markets where it operates the interconnects in violation of Section 2 of the Sherman Act,
A. The Motion-to-Dismiss Decisions
Comcast moved to dismiss the first complaint. R. 22, 23. As every claim of monopolization or attempted monopolization requires anticompetitive conduct, Viamedia proffered three in response to Comcast's motion to dismiss: tying, of Comcast's Interconnect Services to its Ad Rep Services; exclusive dealing, in that Comcast's contracts with MVPDs were exclusive; and a refusal to deal, by denying interconnect agreements with Viamedia or offering commercially unacceptable terms.
Viamedia amended its complaint, realleging its refusal to deal claim. Comcast moved to dismiss this part of the amended complaint, R. 45, 46, which the Court granted. Again, the Court ruled, Viamedia did not plead that Comcast's decision to exclude it from the interconnects was an independently anticompetitive act. Viamedia, Inc. v. Comcast Corp. , No. 16-CV-5486,
B. Comcast's Liability and Damages Experts
During discovery, and in support of its case, Viamedia identified and proffered two expert witnesses: Dr. Furchtgott-Roth, to opine on Comcast's liability; and Dr. Lys, to opine on damages.
1. Dr. Furchtgott-Roth's Opinions
Dr. Furchtgott-Roth's opinions touch on "the nature and extent of Comcast's monopoly power," the distinction between Ad Rep Services and Interconnect Services, and the "exclusionary nature" of Comcast's actions and their impact on the Ad Rep Services market. According to Dr. Furchtgott-Roth, Ad Rep Services and Interconnect *1052Services are "separate products" because there is a "sufficient demand to purchase" those services separately. Furchtgott-Roth Report ¶ 47. He cites "substantial evidence" in support, including Viamedia's own "business model" and the MVPDs that receive "unbundled" Ad Rep and Interconnect Services. By a "conservative" estimate, he submits, 21.5% of cable subscribers use an MVPD that relies on unbundled services, once subscribers to MVPDs that self-provide Ad Rep Services are removed from the mix. Id. ¶ 50. He includes in that group MVPDs that enter into full-turnkey agreements with third-party Ad Reps, which in turn contract with the interconnect operator to have a portion of the avails sold on the interconnects. Id. Dr. Furchtgott-Roth further notes that, although Interconnect Services also entail the selling of avails to advertisers, Ad Rep Services include additional "back office" services, unlike Interconnect Services, which entail "creating and maintaining schedules of advertising, inserting advertising, negotiating with and monitoring Interconnect operators, and allocating advertising inventory among multiple sales channels." Id. ¶ 51. In further support of his separate-products opinion, Dr. Furchtgott-Roth states that "some MVPDs unbundle" services by entering into interconnect-only agreements and "self-providing" Ad Rep Services. Id. ¶ 53.
Having defined separate products, Dr. Furchtgott-Roth explains his tying opinion. Interconnect Services are the tying product, and Ad Rep Services are the tied product. Id. ¶ 63. Evidence of Comcast's tying policy, according to Dr. Furchtgott-Roth, is found in testimony in which a Comcast executive-who worked in the Chicago and Detroit DMAs-agreed with the proposition that "if an MVPD wants to get access to Comcast [Spotlight] controlled Interconnect, it has to hire Comcast [Spotlight] as its ad sales representative." Id. ¶ 64. Dr. Furchtgott-Roth also cites testimony and documents suggesting that WOW! and RCN "understood" that they had to purchase Ad Rep Services from Comcast Spotlight to obtain access to the interconnects in 2014 and 2015. Id. Dr. Furchtgott-Roth reasons further that Comcast had to "exclude" Viamedia from Comcast-controlled interconnects as a "necessary" part of this tying policy, as it ostensibly made clear in 2011 when it "announced" that it was not going to renew its Interconnect agreement with Viamedia as a "continuation of a strategy to have full turnkey direct relationships with the MVPDs." Id. ¶ 65. Similarly, Comcast Spotlight's chief operating officer testified that non-renewal with Viamedia "freed [Comcast Spotlight] up" to "have the opportunity to present and have a direct relationship with WOW and RCN." Id. That tying practice has "manifested" in at least ten other DMAs as well, according to Dr. Furchtgott-Roth, as Comcast has also declined Viamedia interconnect access in those DMAs. Id. ¶ 69. Dr. Furchtgott-Roth opines further that the same conduct "that amounts to tying also amounts to exclusive dealing." Id. ¶ 72.
These practices lead Dr. Furchtgott-Roth to conclude that Comcast has foreclosed competition in the market for Ad Rep Services. Id. ¶ 90. That is, "by tying Spot Cable Ad Rep Services to Interconnect Services and entering into multi-year, exclusive contracts to provide both services as a bundle, Comcast Spotlight has created a formidable competitive advantage for itself over Viamedia." Id. ¶ 87. There is additional market foreclosure, Dr. Furchtgott-Roth opines, because MVPDs recognize that interconnect access is necessary to maximize their profits on avails, and Comcast has cut off Viamedia's access to Comcast-controlled interconnects. Id. ¶ 89-90.
*10532. Dr. Lys's Opinions
Dr. Lys's Amended Report calculates the damages Viamedia has purportedly suffered as a result of Comcast's conduct. He opines, ultimately, that Comcast has caused Viamedia $158 million in damages. Comcast Ex. 6, Lys Am. Report ¶ 37 (R. 273-9). Dr. Lys's opinions assume Comcast's liability for committing anticompetitive conduct. Id. ¶ 16. His opinions make the additional assumptions-albeit phrased as "understanding[s]" in his Amended Report-that Comcast's anticompetitive behavior resulted in the loss of several MVPD contracts. Id. ¶¶ 57-59. Specifically, Dr. Lys predicates his opinions on the "understanding" that "Comcast's anticompetitive conduct" caused Viamedia to lose the RCN and WOW! agreements in 2015, had a "material adverse effect on" Viamedia's retention of an agreement with Verizon in 2013, and caused Viamedia to fail to obtain an agreement with Atlantic Broadband in 2014. Id. His opinions also assume that Comcast's exclusion of Viamedia from the interconnects in Chicago, Detroit, and Hartford caused Viamedia to lose interconnect-related revenues, id. ¶ 56, and that Viamedia lost "out of pocket expenses" from Comcast's conduct. Id. ¶ 60. Dr. Lys divides his damages opinions into seven categories. His ultimate conclusion analyzes Viamedia's damages relating to: (1) interconnect-revenue losses in Chicago and Detroit; (2) interconnect-revenue losses in Hartford; (3) lost future agreements with WOW! for two DMAs; (4) lost agreements with RCN for five DMAs; (5) lost agreements with Verizon for nine DMAs; (6) lost agreements with Atlantic Broadband for six DMAs; and (7) out-of-pocket expenses.
On April 4, 2018, the Court held an evidentiary hearing regarding Dr. Lys's opinions pursuant to Daubert v. Merrell Dow Pharm., Inc. ,
LEGAL STANDARDS
I. Summary Judgment Standard
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A genuine dispute as to any material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. ,
The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact.
*1054See Celotex Corp. v. Catrett ,
"In the field of antitrust law, summary judgment serves a vital function-it avoids wasteful trials and prevents lengthy litigation that may have a chilling effect on pro-competitive market forces." Anderson News, L.L.C. v. Am. Media, Inc. ,
II. Rule 702 and Daubert Standard
Courts may decide the admissibility of an expert witness's testimony in the context of a summary-judgment motion and when deciding whether the case presents a genuine issue of material fact warranting trial. See, e.g. , Manpower, Inc. v. Ins. Co. of Pa. ,
A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.
FED. R. EVID. 702. In Daubert v. Merrell Dow Pharm. ,
In deciding whether to admit expert testimony under Rule 702 and Daubert , "the district court must evaluate: (1) the proffered expert's qualifications ; (2) the reliability of the expert's methodology; and (3) the relevance of the expert's testimony." Gopalratnam ,
ANALYSIS
Comcast argues that summary judgment is appropriate for numerous reasons: Viamedia cannot establish anticompetitive conduct; Viamedia cannot establish causation, in the antitrust sense or for damages purposes; and Viamedia cannot otherwise establish harm to competition. The first two matters are dispositive, and so the Court will address only them. Along the way, the Court will address Comcast's motions to exclude Viamedia's expert opinions where relevant to the analysis.
I. Viamedia Cannot Establish Anticompetitive Conduct
Under Section 2 of the Sherman Act, "[e]very person who shall monopolize, or attempt to monopolize" is subject to antitrust liability.
*1056see also
Not usually counted among the traditional anticompetitive practices is a refusal to deal. Under well-rooted antitrust principles, firms generally have the right to determine with whom they will do business. United States v. Colgate & Co. ,
In the flagship case of Trinko , the Supreme Court held that a telecommunications monopolist had no antitrust duty to deal with a rival, let alone a duty to deal on favorable terms.
Firms may acquire monopoly power by establishing an infrastructure that renders them uniquely suited to serve their customers. Compelling such firms to share the source of their advantage is in some tension with the underlying purpose of antitrust law, since it may lessen the incentive for the monopolist, the rival, or both to invest in those economically beneficial facilities. Enforced sharing also requires antitrust courts to act as central planners, identifying the proper price, quantity, and other terms of dealing-a role for which they are ill suited. Moreover, compelling negotiation between competitors may facilitate the supreme evil of antitrust: collusion.
Indisputably, Comcast refused to deal with Viamedia by disallowing it access (or refusing it "reasonable" access) to the Chicago, Detroit, and Hartford interconnects. See, e.g. , CSF ¶ 48, VSF ¶ 15. That was its right under Trinko and the law of this case. See Viamedia I ,
Viamedia, however, submits that Comcast's conduct constitutes more than a "mere" refusal to deal. R. 326 at 26. It argues that Comcast, in excluding Viamedia (and by extension, Viamedia's customers) from the interconnects and later taking RCN's and WOW!'s business, has engaged in the "distinct" practices of tying, exclusive dealing, or general exclusionary conduct. See Viamedia I ,
A. There Is Insufficient Evidence that Comcast Engaged in Anticompetitive Tying
Viamedia claims that Comcast tied access to the interconnects, or Interconnect Services (the tying product), to Comcast's Ad Rep Services (the tied product). "A tying arrangement is 'an agreement by a party to sell one product but only on the condition that the buyer also purchases a different (or tied) product, or at least agrees that he will not purchase that product from any other supplier.' " Eastman Kodak Co. v. Image Tech. Servs., Inc. ,
1. No Evidence Tends to Exclude the Likelihood That Comcast, Rather Than Tying Services, Simply Refused to Deal with Viamedia
Viamedia has not identified a genuine issue of fact as to whether Comcast tied *1058the sale of Interconnect Services and Ad Rep services.
No evidence shows that Comcast told MVPDs, expressly or impliedly, that they could only purchase Interconnect Services on the condition that they also purchase Ad Rep Services. See Photovest Corp. v. Fotomat Corp. ,
Viamedia tries to do away with this inconvenient fact in two ways. First, it argues that Comcast did not sell interconnect-only deals in Chicago, Detroit, and Hartford, where Comcast denied Viamedia use of the interconnects. This case, however, is not limited to those markets-Viamedia challenges Comcast's conduct in the markets in which it operates the interconnects generally. Am. Compl. ¶¶ 1, 180; see also Furchtgott-Roth Report ¶¶ 63-73. Second, Viamedia contends that substantial evidence of unbundled sales does little to defeat a tying claim in cases where there is an "announced condition," "rebuffed request for separate provision," or "publicized policy" of tying. See Areeda & Hovenkamp, ANTITRUST LAW ¶¶ 1756a, 1756b. True enough, but this is no such case. The record lacks evidence showing that Comcast told customers that they could not receive an interconnect-only deal-that is, Interconnect Services-standing alone.
*1059Even focusing exclusively on Chicago, Detroit, and Hartford, there is insufficient evidence of conditioning. "A high percentage, even 100 percent, of unbundled sales does not itself indicate that two products may have been tied together" because "buyers may have all bought the products bundled because they preferred them together."
Viamedia responds by pointing out that Comcast never offered RCN or WOW! an interconnect-only deal. VSF ¶ 19. But why would it? Firms soliciting business have no reason to offer potential customers a less substantial (and presumably less profitable and less efficient) deal than the one those customers seek. Areeda & Hovenkamp, ANTITRUST LAW ¶ 1700i ("[F]inding two products does not mean that they are tied together. The franchisee may have preferred a 'turnkey' franchise and never asked for the" tying product "separately"); see also Kaufman ,
Viamedia thus cannot show that Comcast ever withheld the tying product from customers unless they also purchase the tied product. Live Nation ,
Viamedia's theory extends tying beyond the law's recognition. The constraining of consumer choice is of course a feature of a tying arrangement, Areeda & Hovenkamp, ANTITRUST LAW ¶ 1756b2, but there must still be an actual "tie" of products or services, *1060Reifert v. S. Cent. Wisconsin MLS Corp. ,
Aerotec Int'l, Inc. v. Honeywell Int'l, Inc. ,
A similar story unfolded in Serv. & Training, Inc. v. Data Gen. Corp. ,
Like the third-party competitors in Aerotec and Data General , Viamedia has shown "no direct condition" of a tie. Aerotec , 836 F.3d at 1179 ; see Data Gen. ,
Viamedia's insistence that comments made by RCN, WOW!, and Comcast create a genuine issue of fact as to whether there was tying is misplaced. RCN and WOW! stated that they understood that they could not have their avails sold on Comcast-operated interconnects without hiring Comcast as their "representative." VSF ¶ 18. A Comcast executive, moreover, answered "yes" when asked by the Department of Justice whether it was Comcast's "business practice" that if "an MVPD wants to get access to a Comcast controlled Interconnect, it has to hire Comcast as its ad sales representative." See id. ¶¶ 13, 18, 19. None of these statements, however, "tend[ ] to exclude the possibility" that Comcast's conduct "was as consistent" with a legal refusal to deal as an illegal tying of its services. Mercatus Grp. ,
The undisputed context of those statements matters. See *1062Matsushita ,
Data General is again instructive. There, the plaintiff-servicer presented evidence that in pitching its maintenance service Data General had "stated to potential customers that only Data General" could use the diagnostic tool-the implication being, of course, that customers had to hire Data General services to receive the benefit of the diagnostic tool. Data Gen. ,
None of this is to say that, as a matter of law, for a tying condition to be cognizably anticompetitive it must be applied directly and only to the end user, not its representative. Cf. COPECA, Inc. v. Western Aviation Servs. Corp. ,
*1063Another wrinkle of Viamedia's claim is worth addressing. Although Viamedia does not define Ad Rep Services as only full-turnkey services, see Furchtgott-Roth Report ¶¶ 22-29, it occasionally refers to Comcast's tie as one of Interconnect Services to full-turnkey Ad Rep Services, see VSF ¶ 18, CSF, Resp. to ¶ 48. That changes little. For one, the record is devoid of evidence that customers could not receive Comcast's Interconnect Services standing alone (only that they could not receive those services through Viamedia's representation). Equally important, in a full-turnkey relationship with a third-party Ad Rep the MVPD does not directly contract for Interconnect Services. It relies on its Ad Rep-to which it has assigned all of its avails in a DMA-to make sure that a portion of those avails are sold on the interconnects. See, e.g. , VSF ¶¶ 1-3. Focusing on that scenario, there can be no anticompetitive tie.
Professors Areeda and Hovenkamp explain why. Suppose an ingot manufacturer "refuses to sell separately but rather fabricates into products like building wall sections, which it sells directly to builders." Areeda & Hovenkamp, ANTITRUST LAW ¶ 1748a. A rival fabricator demands ingot separately "so that it too can bundle it with fabrication services in order to make and sell walls. When the defendant refuses, [the rival] claims the defendant is tying ingot to fabrication services."
[T]he gravamen of the complaint is not that the defendant's bundled sales have foreclosed rivals from selling unbundled fabrication to the defendant's customers. Rather, the gravamen is that the defendant's refusal to sell unbundled ingot to the defendant's rival has prevented the rival from selling the very same ingot/fabrication bundle sold by the defendant.... For example, the plaintiff does not want the defendant to offer ingot separately to builders; nor would doing so eliminate any relevant "foreclosure" when builders do not want "un-tied" ingot in order to arrange separately for its fabrication. Rather, the plaintiff seeks to hold the defendant liable for not selling the plaintiff ingot so that it can fabricate ingot into wall sections too.
Viamedia submits that this principle applies only "to situations where the only separate demand for the tying product comes from the defendant's rivals." R. 326 at 31; see also R. 235 at 10. Not so. "Even if the separate provision of ingot [the tying product] and fabrication [the tied product] is common in competitive analogues," there is no liability for tying "when the plaintiff's theory of injury is not that customers of the defendant's bundle would buy the items unbundled if they could, but rather that a rival could sell the same bundle if only the defendant would sell it a particular input." Areeda & Hovenkamp, ANTITRUST LAW ¶ 1748b; see also
This is the "gravamen" of Viamedia's tying claim-that Comcast's refusal to provide it interconnect access prevents it from selling the kind of full-turnkey Ad Rep Services that WOW! and RCN desire. Although MVPDs in a full-turnkey relationship with a third-party Ad Rep may consider themselves to receive Interconnect Services from the interconnect operator, see VSF ¶ 3, it is undisputed that those MVPDs have one agreement with one Ad Rep that makes those Interconnect Services available to them without having to *1064have a direct relationship with the interconnect operator. (That is, of course, Viamedia's business model.) See, e.g. , id. ¶¶ 1, 3; see also Furchtgott-Roth Report ¶ 53 (describing arrangements, unlike Viamedia's practice, in which MVPDs contract separately for Ad Rep Services and Interconnect Services as "unbundle[d]" transactions). Viamedia has no antitrust right to force Comcast to help it sell such a bundle to their mutual customers. See Areeda & Hovenkamp, ANTITRUST LAW ¶¶ 1748a, 1748b; accord Linkline ,
Viamedia further argues that deciding Comcast did not tie services would "conflict[ ] with sound antitrust policy." R. 326 at 29. It provides no authority for its perspective on what antitrust policy should be, and understandably. Viamedia's view "demand[s] that holders of market power cooperate with rivals"-a view that "bit the dust" with Trinko . Frank H. Easterbrook, The Chicago School & Exclusionary Conduct , 31 HARV. J.L. & PUB. POL'Y 439, 441-42 (2008). Courts routinely tout the procompetitive benefits of integration, even if middlemen suffer. See, e.g. , It's My Party ,
2. Dr. Furchtgott-Roth's Opinions Regarding Comcast's Supposed Tying Are Inadmissible
Dr. Furchtgott-Roth also opines that Comcast had an effective tying policy. He asserts that Comcast's own admissions and MVPDs' statements demonstrate that Comcast had a practice of tying, and that excluding Viamedia from the interconnects was a "necessary aspect" of that tying strategy. Furchtgott-Roth Report ¶ 3.e.; see also id. ¶¶ 63-71. These opinions, however, are inadmissible. They would not assist the trier of fact and are contrary to the law.
Rule 702(a) and Daubert provide that "[a]n expert's opinion is helpful only to the extent the expert draws on some special skill, knowledge, or experience to formulate that opinion"-in other words, "the opinion must be an expert opinion." United States v. Benson ,
Dr. Furchtgott-Roth's tying opinions fail these requirements. Furchtgott-Roth Report ¶¶ 63-71. His opinion that Comcast had a tying policy rests exclusively on a lay interpretation of evidence that this Opinion has already discussed. Id. ¶¶ 64-66. Quoting the Comcast testimony provided to the DOJ cited above, supra at 1061-62, for example, he matter-of-factly asserts that "Comcast has admitted that it ties Spot Cable Ad Rep Services to Interconnect Services." Id. ¶ 64. He also relies on the MVPDs' statements to conclude that the MVPDs "understood" that they had to deal with Comcast to obtain Interconnect Services. Id. ¶ 64. Although Dr. Furchtgott-Roth later adopts his interpretation of those documents "[a]s a matter of economics," id. ¶ 68, he does not undertake any expert assessment in arriving at that conclusion. Elorac, Inc. v. Sanofi-Aventis Canada Inc. , No.
So unhelpful are Dr. Furchtgott-Roth's tying opinions that Viamedia, in arguing that there is an issue of fact as to whether Comcast engaged in tying, does not rely on them (either directly or via its Statement of Additional Facts). See R. 326 at 18-22, 26-30. Viamedia, instead, simply cites directly to many of the same pieces of evidence that Dr. Furchtgott-Roth does. Indeed, no expertise is needed to interpret, contextualize, or synthesize that evidence. See Davis v. Duran ,
Dr. Furchtgott-Roth's narrative, moreover, is contrary to the law for reasons already explained. His opinions seek to *1066hold Comcast liable for the mere withholding of the tying product, not the forced sale of a tied product, and not even to a customer, but to a competitor. See Furchtgott-Roth Report ¶¶ 67, 69-71; see Aerotec , 836 F.3d at 1178-80. Those opinions are "inconsistent with the definitions of tying and coercion in the context of tying claims," and thus inadmissible. Gumwood HP Shopping Ptrs., L.P. v. Simon Prop. Grp., Inc. , No. 3:11-CV-268 JD,
B. There Is Insufficient Evidence that Comcast Engaged in Anticompetitive Exclusive Dealing
Viamedia next contends that Comcast engaged in exclusive dealing. Generally, "[a]n exclusive dealing contract obliges a firm to obtain its inputs from a single source." Paddock Publ'ns, Inc. v. Chicago Tribune Co. ,
Viamedia does not explain its exclusive dealing claim.
"The exclusion of competitors is cause for antitrust concern only if it impairs the health of the competitive process itself." Roland Mach. ,
To the contrary, Viamedia's own expert, Dr. Furchtgott-Roth, explains the procompetitive benefits of Comcast's deals. By bundling Interconnect Services and Ad Rep Services and selling them on an exclusive basis, Comcast is "able to offer financial terms to MVPDs that are much more generous than any terms Viamedia could feasibly (much less profitably) offer." Furchtgott-Roth Report ¶ 87.
That Comcast's exclusive deals do not harm competition is further established by the fact that they are the very deals that MVPD-consumers seek. To be sure, the law can prohibit monopolists from engaging in conduct generally permitted to those without market power. Eastman Kodak ,
Viamedia does not dispute these facts. It admits that "full turnkey Spot Cable Ad Rep Services agreements have benefits." R. 326 at 23. It complains, instead, that it lacks "a fair playing field" on which to compete for such agreements, because of "Comcast's use of its conceded monopoly power over the Interconnects."
C. Viamedia's Claim for Otherwise Anticompetitive Conduct is Procedurally Barred and Meritless
Viamedia also invokes a catchall exclusionary conduct claim, arguing that "however" Comcast's conduct is described it is anticompetitive. As Viamedia notes, the law precludes exclusionary conduct for Section 2's purposes even if that conduct does not neatly fall into one of the traditional forms of anticompetitive conduct under Section 1. See, e.g. , Areeda & Hovenkamp, ANTITRUST LAW ¶ 777a ("While the standard for a § 2 violation is significantly stricter in its power assessment, it is broader and less categorial in its definition of proscribed conduct.").
Viamedia, however, is procedurally barred from raising this claim. Despite extensive motion to dismiss briefing and numerous hearings in court, Viamedia has never raised this claim before. "It is well settled that a plaintiff may not advance a new argument in response to a summary judgment motion." Abuelyaman v. Illinois State Univ. ,
The Court relied on that assertion in Viamedia I , concluding that Viamedia's claim was not " 'free standing' because it alleges particular types of anticompetitive conduct." Viamedia I ,
Setting waiver and estoppel aside, Viamedia's claim fails.
II. Even If Comcast Had Engaged in Anticompetitive Conduct, Viamedia Cannot Show that It Caused Viamedia's Antitrust Injury or Damages
Even if Viamedia had presented a question of fact as to whether Comcast engaged in tying, exclusive dealing, or other anticompetitive conduct, its case still fails. At summary judgment, a plaintiff must demonstrate an issue of fact with respect to each element of its claim-including causation. See Dalton v. Teva N. Am. ,
*1070A. Viamedia Cannot Show Antitrust Injury
To establish an antitrust injury, a plaintiff must show that the anticompetitive conduct complained of was "the cause-in-fact of the injury"-that is, " 'but for' the violation, the injury would not have occurred." Kochert v. Greater Lafayette Health Servs., Inc. ,
In assessing whether a defendant's anticompetitive conduct caused a plaintiff's antitrust injury, courts assume that the defendant acted anticompetitively. Id. ¶ 338. Here, that means assuming that Comcast engaged in tying, exclusive dealing, or other exclusionary and cognizably anticompetitive conduct. So doing, Viamedia is nevertheless unable to present an issue of fact as to whether its alleged antitrust injuries resulted from that anticompetitive conduct as opposed to Comcast's undisputed and legal refusal to deal.
Without exception, each injury Viamedia identifies-the lost revenue from the Chicago and Detroit interconnects after Comcast refused to renew the 2003 agreement in 2012; lost contracts with MVPDs; the lost revenue from the Hartford interconnect; and the attendant business expenses and talent loss-is fully attributable to Comcast's decision to deny Viamedia interconnect access. Dr. Furchtgott-Roth, for example, asserts that Viamedia's foreclosure from the market "flows directly from Viamedia's inability to access" the interconnects. Furchtgott-Roth Report ¶ 90 (emphasis added). Dr. Lys, likewise, premises all of his damages opinions on the assumption that absent Comcast's anticompetitive conduct Viamedia would have had reasonable access to the interconnects. E.g. , Lys Report ¶ 34(1)-(7). He even testified that his "entire damages estimate is based directly or indirectly on Viamedia's lack of access to Comcast Spotlight's interconnect in Chicago, Detroit, and Hartford." Comcast Ex. 7 at 235:18-236:20. Mark Lieberman, Viamedia's CEO, similarly complains that "Viamedia lost business and revenues as a consequence of being excluded from Comcast-operated Interconnects." Viamedia Ex. 5 at 5. By all accounts, Viamedia's refusal to deal with Comcast explains entirely Viamedia's injuries.
*1071See MCI Commc'ns Corp. ,
Novell is on point. In that case, a software-providing competitor of Microsoft's, Novell, filed suit under Section 2. Novell ,
Viamedia offers no meaningful rejoinder to this plain fact. At most, Viamedia submits that as long as it has established the type of injuries with which the antitrust laws are concerned, the Court should "presume that such an injury ... was caused by" an anticompetitive act. R. 326 at 35 (citing Publ'n Paper ,
It is black-letter law that Viamedia must show that it would have suffered antitrust injury but for Viamedia's anticompetitive conduct. E.g. , Kochert ,
*1072B. Viamedia Cannot Show Damages Resulting from Supposedly Anticompetitive Conduct
Viamedia's asserted damages suffer the same problem. Despite the complicated nature of proving damages causation in an antitrust case, see J. Truett Payne Co. v. Chrysler Motors Corp. ,
1. Viamedia's Evidence of Causation Does Not Distinguish Between Damages Caused by Competitive and Anticompetitive Conduct and Thus Fails
"When a plaintiff improperly attributes all losses to a defendant's illegal acts, despite the presence of significant other factors"-like lawful competition-"the evidence does not permit a jury to make a reasonable and principled estimate of the amount of damage." MCI Commc'ns Corp. ,
That it is precisely what Viamedia has done. Its evidence fails to disaggregate the damages caused by Comcast's lawful refusal to deal from Comcast's supposed tying, exclusive dealing, and other exclusionary conduct. Lieberman's affidavit is exemplary. He attests that "Viamedia's exclusion from" the Chicago and Detroit "Interconnects has caused Viamedia and its MVPD partners to lose revenues they otherwise would have earned from Interconnect sales, which has, in turn, reduced Viamedia's cash flows and financial stability," causing in turn "MVPD partners to switch to other ad representation firms." Viamedia Ex. 5 at 6. It repeats similar claims for pages. See id. at 7 ("Due to loss of access to the Chicago and Detroit Interconnects, Viamedia was ultimately unable to make a competitive financial offer" to RCN), 11 (complaining of the purported results of Comcast's decision to "deny[ ] Viamedia the ability to continue purchasing Interconnect Services on behalf of [its] MVPD clients), 13 ("If Viamedia had never been excluded from the Interconnects Chicago, Detroit, and Hartford, I am confident that the momentum Viamedia had in the marketplace prior to 2012 ..."). Dr. Lys's damages opinion likewise conflates the financial consequences of Comcast's refusal to deal with the results of Comcast's supposedly anticompetitive conduct. See generally Lys Am. Report. He, again, admitted that his "entire damages estimate is based directly or indirectly on Viamedia's lack of access" to the interconnects in Chicago, Detroit, and Hartford. Comcast Ex. 7 at 236:10-20. All of this evidence (to the extent it is admissible) attributes Viamedia's damages to Comcast's decision not to permit Viamedia interconnect access-its refusal to deal.
Under the law, Viamedia must be able to segregate the damages (to a reasonable degree, at least) caused by lawful competition from those caused by anticompetitive acts. See MCI Commc'ns Corp. ,
2. Dr. Lys's Damages Opinions Are Inadmissible
As Dr. Lys's Report and testimony, plus Viamedia's representations at the Daubert hearing, make clear, the entirety of his opinion assumes that but for Comcast's supposed anticompetitive practices, Viamedia would have been able to access the interconnects and compete as it had before 2011. See, e.g. , Daubert Hr'g Tr., R. 354, at 153:24-154:5 (Viamedia's counsel indicating that Dr. Ly's "assume[d] causation" and that the question of whether those assumptions are permissible is "a question about summary judgment"). An expert's testimony is inadmissible, however, if it does not fit "the facts of the case." Owens ,
Dr. Lys's opinions are inadmissible, as they rest on the unfounded assumption that Viamedia could have accessed the interconnects but for Comcast's anticompetitive conduct. See, e.g. , Buscaglia v. United States ,
3. Viamedia's Claim for Injunctive Relief Fails
On a final note, Viamedia also requests injunctive relief from Comcast's conduct. R. 40 at 50. As an initial and obvious matter, Viamedia is not entitled to this relief because it has not shown an issue of fact as to whether Comcast engaged in anticompetitive conduct or that any such conduct caused it injury or damages. But the Court addresses Viamedia's request-that it enjoin Comcast from "any effort to exclude Viamedia or its MVPD clients from participating on a fair and open basis in the Interconnects"-because it, too, betrays the fundamental flaw in its case.
Antitrust law does not allow the injunctive relief Viamedia seeks. See Areeda & Hovenkamp, ANTITRUST LAW ¶ 774c. Trinko and Linkline prohibit enforced sharing absent a duty to deal, and for good reason. Forced sharing "lessen[s] the incentive for the monopolist, the rival, or both to invest," it requires courts to act as "central planners" over the proper terms of such sharing, and it can compel the "supreme evil of antitrust: collusion." Trinko ,
Viamedia brought this case in an attempt to force-under Court order-Comcast to provide it access to the interconnects on favorable terms. Antitrust law does not oblige.
CONCLUSION
For the foregoing reasons, the Court grants Comcast's motion for summary judgment, grants in part Comcast's motion to exclude Dr. Furchtgott-Roth's opinions and denies the remainder as moot, grants Comcast's motion to exclude Dr. Lys's opinions, and enters judgment in Comcast's favor.
Sitting by designation (R. 346).
Comcast argues that Viamedia's Statement of Additional Facts exceeds the court-ordered limit of 75 facts (see R. 315) by compounding multiple facts into single paragraphs, and asks the Court to strike the stated facts exceeding that limit. R. 339 at 25. Although Comcast has a point-Viamedia's fact-packing borders on gamesmanship-the Court, in its discretion, will not strike any of Viamedia's stated facts. See Benuzzi v. Bd. of Educ. of Chi. ,
The Court will refer to Comcast's Rule 56.1 Statement of Undisputed Facts with Viamedia's responses (R. 327) as "CSF," and Viamedia's Rule 56.1 Statement of Additional Facts with Comcast's responses (R. 341) as "VSF." Unless otherwise noted-specifically, with a "Resp. to ¶ "-a citation to a paragraph refers to the paragraph itself and not to the opposing party's response.
Comcast challenges this fact, proffered by Viamedia's expert Dr. Furchtgott-Roth, as unsupported because Dr. Furchtgott-Roth's opinions are inadmissible. See Furchtgott-Roth Report ¶ 44. Comcast, however, did not move to exclude this opinion from Dr. Furchtgott-Roth's report. See R. 211.
Comcast Cable Communications Management, LLC is a successor to Comcast Spotlight, and it is a wholly owned subsidiary of Comcast Corporation. CSF ¶ 5. Both parties nevertheless refer to Comcast's spot cable ad rep business as Spotlight, and so will the Court.
Viamedia paints these requests by WOW! as "directly solicited proposals." VSF ¶ 19. To the extent Viamedia means that WOW! sought a direct, interconnect-only deal with Comcast, it is mistaken. The record makes clear that WOW! in 2014 was still under contract with Viamedia (and so could not "directly" engage Comcast for anything, even an interconnect-only deal), and that WOW!'s 2014 request sought "to get Viamedia back into the Chicago and Detroit interconnects." Viamedia Ex. 14 at 108:25-109:4; id. at 105:16-19 (emphasis added).
Comcast and Viamedia agree that there is no material difference between the federal antitrust claims and their state-law claims. R. 271 at 11 n.3; R. 23 at 15; R. 28 at 15. For the same reasons why Viamedia's federal antitrust law claims fail (as explained below), so too does its state-law claims.
Viamedia also raised a monopoly-leveraging theory, but that claim is predicated on underlying anticompetitive activity. See Schor v. Abbott Labs. ,
At the pleading stage, Viamedia also complained that Comcast had threatened to "shut Viamedia and its MVPD clients out" of using National Cable Communications LLC ("NCC"), a multi-DMA exchange. See Compl. ¶ 59. Viamedia appears to no longer pursue that theory, as "NCC" is mentioned in neither its response brief nor its Statement of Additional Facts.
Belatedly, and despite not designating Dr. Lys as causation expert, Viamedia submitted additional opinions from Dr. Lys, including opinions regarding causation. The Court granted Comcast's motion to strike those opinions. R. 283.
The Court assumes that Interconnect Services and Ad Rep services are distinct services for tying purposes, and that MVPDs "consider" themselves as receiving Interconnect Services from interconnect operators (like Comcast) even when they have hired a unaffiliated Ad Rep (like Viamedia) on a full-turnkey basis. See, e.g. , R. 326 at 27.
As noted, Viamedia does not define Ad Rep Services as exclusive, full-turnkey representation. See, e.g. , Furchtgott-Roth Report ¶¶ 24-25; R. 326 at 7. Doing so would necessarily defeat its tying claim, for reasons discussed below.
Viamedia does not claim a "negative tie." See In re Dealer Mgmt. Sys. Antitrust Litig. ,
Viamedia's attempt to distinguish Aerotec is meritless. It argues that, "unlike the plaintiff in Aerotec , Viamedia does not purchase Interconnect Services for its own account, but rather purchases them on behalf of MVPDs." R. 326 at 28. How one could read Aerotec and conclude that the plaintiff (a repair servicer) purchased replacement airplane parts "for its own account"-as opposed to "on behalf of" its airplane-owning customers-is questionable. Like Viamedia, it was precisely because the plaintiff could not make available the supposedly tying product (replacement parts) to its customers that its business suffered. Aerotec , 836 F.3d at 1177 ; see also Aerotec Int'l, Inc. v. Honeywell Int'l, Inc. ,
The Court recognizes that commentators and courts have remarked on the fact that a refusal to deal with related-market competitors-and vertical integration generally-can appear to have a tying effect in certain markets. MCI Commc'ns Corp. v. Am. Tel. & Tel. Co. ,
Viamedia makes no argument that Comcast effectively and anticompetitively ties Interconnect Services to Ad Rep Services through discounted bundling. Nor could it, as no evidence shows that Comcast ever predatorily priced-or even sold below cost-its services. See Midwest Gas Servs., Inc. v. Indiana Gas Co. ,
Viamedia's defense of its exclusive dealing claim is near perfunctory. It devotes just a page and a half to this claim in its 46-page brief, and in the course of that page and a half neither cites a single fact nor raises a single case save for Viamedia I.
To the extent Dr. Furchtgott-Roth opines that Comcast has foreclosed Viamedia from the market as a result of its tying or exclusive dealing practices, see Furchtgott-Roth Report ¶ 90, those opinions are inadmissible because, for the reasons discussed in the text, his predicate opinions regarding the alleged tying and exclusive dealing are inadmissible as they are unhelpful to the jury and contrary to the law. In any event, Viamedia's response does not rely on Dr. Furchtgott-Roth's foreclosure opinions.
Viamedia's response does not rely on Dr. Furchtgott-Roth's opinion about exclusive dealing. This opinion, in any event, is inadmissible. See Furchtgott-Roth Report ¶¶ 72-73. Constituting just two paragraphs, Dr. Furchtgott-Roth's opinion conflates tying and exclusive dealing. He asserts, "the same conduct by Comcast Spotlight that amounts to tying also amounts to exclusive dealing." Id. ¶ 72. Dr. Furchtgott-Roth, again, applies no expertise, analysis, or study in reaching that conclusion. See Fed. R. Evid. 702. He merely posits the broad assertion. Further, because his predicate tying opinions are inadmissible, so too is his one-in-the-same exclusive dealing opinion. The Court therefore excludes it. Id. ¶¶ 71-72.
Viamedia appears to use its catchall theory as protection in case the Court found that Interconnect Services and Ad Rep Services are not separate products for tying purposes. See R. 326 at 25 ("In particular, unlike Section 1 tying claims, Section 2 doctrine does not require Viamedia to establish the existence of separate products"). As noted earlier, the Court has assumed that the products are separate.
In fact, Viamedia's short shrift of the issue prompts Comcast to argue that Viamedia has waived any argument about causation and antitrust injury. R. 339 at 4 n.3.
Even assuming arguendo that the but-for world is a place where Comcast decides to permit Viamedia on the interconnects on friendly terms, the Court is dubious that Viamedia's lay evidence of causation regarding the loss of future business (the largest part of its damages claim) would suffice. Despite Viamedia's pronouncements about its management team's work (e.g. , R. 326 at 40), "Viamedia's projections" are not based on any economic price or terms analyses (at least as far as the record is concerned). Viamedia's refrain that it need not examine prices because the Ad Rep market is a "relationship business" is convenient; there is in fact no specific evidence showing that Viamedia could have competed with Comcast on price. See CSF ¶¶ 116-122 (Comcast, on average, offered better revenue shares to MVPDs than Viamedia). Further, not a single MVPD testified that it would have selected Viamedia but for its lack of interconnect access. Viamedia did not hire an expert to opine on causation, and lay persons are generally forbidden from doing precisely as Viamedia's management does here-testify regarding "hypotheticals or assumptions" about what might have happened in the future. Gumwood HP Shopping Ptrs. L.P. v. Simon Prop. Grp., Inc. ,
Reference
- Full Case Name
- VIAMEDIA, INC. v. COMCAST CORPORATION and Comcast Spotlight, LP
- Cited By
- 8 cases
- Status
- Published