In Court: A case to watch

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A little-noted antitrust lawsuit that pits a Boston ad agency against AT&T Broadband may send a warning message to the so-far somnambulant ad industry about media consolidation.

The case is akin to issues the Justice Department faces in media mergers-examining whether various kinds of media advertising truly substitute for each other or should be viewed separately.

The Federal Communications Commission has been moving headfirst toward making dramatic changes to allow media companies to own much bigger chunks of the local and national media market. Consolidation critics contend the tempest in Boston is likely to grow if the FCC moves forward and the media landscape grows more consolidated.

mirrors other cases

"If you remove the limit on [broadcasters or cable companies] owning newspapers, we are talking not just about a cable, Internet, radio and magazine conglomerate," said Chris Murray, Internet and telecommunications counsel for Consumers Union.

Consumer groups say the issues raised in the Boston case mirror other cases: the proposed purchase of AT&T Broadband by Comcast Corp., and EchoStar Communications Corp.'s (Dish Network) purchase of Hughes Electronics' DirecTV.

In its suit, Boston shop Prime Communications contends AT&T tried to use its local cable monopoly to force advertisers to buy its cable ads and other products. It also alleges AT&T tried to force out a competitor.

Prime handles 130 area car dealers, producing print, TV and radio ads. It also buys time and manages Web sites, including one called cablecars.com, where consumers can search for a specific car. Last April, Prime started selling a service called Prime IQ to let dealers track which ads lured which customers.

According to Prime's antitrust case, AT&T tried to buy Prime IQ and get Prime to commit to selling its dealers on cable. When Prime rejected the offer, AT&T (which owns the bulk of Massachusetts area cable systems) barred Prime from buying any cable ad time, the suit alleges. It also offered its own ad production services to dealers and cut prices to get dealers to sign on, according to the suit.

AT&T sought to have the case dismissed, arguing in part that Prime could still buy other media, and that the agency didn't have standing because it was acting only as an agent of car dealers. AT&T called the lawsuit "entirely without merit."

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