The Justice Department filed an antitrust suit yesterday seeking to block the establishment of a controversial pay television system that combined the forces of four of the nation's leading motion picture companies and Getty Oil Co.
The new venture, which is to be known as Premiere, had drawn criticism from the cable television industry and companies that already provide programming services, since it would have provided the new network with exclusive initial use of movies from the firm's four partners.
The movie companies -- Columbia Pictures Industries Inc., MCA Inc., Paramount Pictures Corp., Twentieth Century-Fox Film Corp. -- had announced the joint venture with Getty last spring, hoping to get it off the ground early next year.
Getty, the Californian-based oil company with assets of about $6 billion, is already in the entertainment business with an 85 percent interest in a cable television sports network, Entertainment and Sports Programming Network Inc. Getty is proposing to offer financial backing and satellite facilities to the new firm.
In the suit, filed in federal court in New York, the department's antitrust division alleged that the price of movies would be fixed and maintained at artificially high levels and that competition between the firms and network program services would be limited.
The department is seeking a preliminary injunction to block continued development of the firm and has asked the court to rule the venture illegal and permantly block the plan.
Premiere proposed setting up a statellite network providing movies to cable and pay television systems. The new company would have exclusive rights to productions from the industry partners for at least nine months after they are made available. The companies involved also agreed to the price they will charge pay-TV systems for their films.
Burt Harris, Premiere's chairman, said he was "surprised and disappointed" by the suit and said the company's development could in fact lead to competition in the industry. "We are confident these issues will be resolved satisfactorily for Premiere," Harris said.
Home Box Office and Showtime, two other cable systems, have about 85 percent of the market.