Freeband TV News

Big dreams, but Comcast not in for an easy ride

Chris Andrews

Coalition calls for heavy scrutiny of NBCU deal

Back in December, FBTVN looked at the Comcast deal to acquire NBC Universal, and highlighted a number of potential downsides to both consumers and Comcast’s competition. There is much in all this for US regulators to consider before allowing it to go through and a coalition of the angry has now thrown its hat into the ring.

The 25 member coalition, which includes The American Cable Association, the Satellite Broadcasting & Communications Association, the National Telecommunications Cooperative Association and the Organization for the Promotion and Advancement of Small Telecommunications Companies, has called for major conditions on the transaction to ensure, “that the media giant can't inflict anticompetitive harms on small cable operators or injure consumers by imposing business models that both drive up prices and require the purchase of unwanted content available on cable and the Internet”.

The coalition has written to President Barack Obama and members of Congress, and they aren’t exactly pulling punches. “The merged giant would have strong incentives to discriminate against other multichannel video providers in granting access to its wealth of programming, including all of its broadcast stations and ‘must-have’ national and regional networks that air live or same-day sporting events, as well as the market power to enforce anticompetitive ‘bundling,'" it wrote.

"By taking control of NBCU, Comcast would become the country's most powerful online and traditional programming company with every incentive to raise prices, restrict choice and force operators to sell consumers content that they don't want in order to continue viewing programs they sincerely desire,” said ACA President and CEO Matthew M Polka. “In their ads, Comcast and NBCU ask people to 'Dream Big' but small cable operators know this deal will be a nightmare for millions of their customers without appropriate conditions."

The $30 billion deal requires approval of the Federal Communications Commission and U.S. Department of Justice, and the review is expected to take up to a year to complete. The Senate Antitrust, Competition Policy and Consumer Rights Subcommittee recently announced plans to hold a hearing in late January or early February.

If the deal is approved, Polka believes that Comcast-NBCU will have both the incentive and the ability to compel competitors to pay more for programming than they should, particularly for re-transmission consent for NBCU broadcast stations and for other national and regional networks that feature live or same-day sporting events considered ‘must have' content by consumers. It’s worth noting NBCU has the US rights for next month’s Winter Olympics in Vancouver and broadcast the 2008 Olympics in Beijing.

Polka added that in reviewing the transaction, FCC and Justice Department officials need to look beyond Comcast-NBCU's ‘vague promises of good behaviour’ and focus on the company's ‘undeniable ability and financial incentive to distort competition and easy inclination to migrate to the Internet a flawed cable programming market that routinely results in higher monthly cable bills and the inability of operators to offer consumers the programming packages they want to view’.

It is worth noting that Comcast recently lost a procedural matter in court, which means a long-term class action lawsuit filed against the company, will continue to be prosecuted. The suit, Behrend v Comcast deals with, among other things, the company’s acquisition of AT&T Broadband back in 2001, which led to alleged violations of anti-monopoly provisions of the Sherman Antitrust Act. Put simply, once Comcast acquired the company, it hiked up prices, and thus led to the suit.

Whether this will affect the NBCU merger is questionable, but it does go some way towards demonstrating that Comcast has a history of ‘acquire and hike’, which regulators must take into consideration. Dream big indeed.

Latest Press Releases