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Clock Starts Ticking as Comcast Submits Studies to FCC

“This transaction is likely to lead to greater investments in new platforms and services.”

Comcast strongly defends its planned deal for NBC Universal in two new studies filed Wednesday with the Federal Communications Commission.

In the studies, the cable giant contends that the $30 billion deal is “likely to lead to a substantial investment in programming and an increase in the quantity, quality and viewing convenience of video programming.” 

One report was an economic analysis; the other was on web video and issues of content availability and preferentiality.

The studies were requested by the FCC, which had put off its review of the Comcast deal pending the filing because it wanted consumer and industry reaction to the reports.

 

The filing of of the reports restarts the clock on the FCC review of the deal. Next, the FCC will take comments until June 21, then responses until July 21. Finally, responses to the responses have to be filed by Aug. 5.

 

"The deal will give the combined company the wherewithal to boost content to Comcast for a variety of video programming both on NBC and elsewhere,” the economic study said. “This transaction is likely to lead to greater investments in new platforms and services."

“Comcast," the study continued, "is ready to make those investments because the transaction will reduce frictions between Comcast and NBCU and bring their incentives into closer alignment. The transaction will enable Comcast … to provide video services whenever, wherever, and however consumers want.”

The study also cited several other potential consumer benefits.

It said consumers would get better access to movies and programming on a larger variety of platforms.

Comcast, it said, could get the right to offer movies on demand at least from Universal Studios, on the same day a film starts DVD sales or possibly — at premium prices –even earlier. It said the deal could ease rights negotiating problems for Comcast’s Xfinity platform that lets consumers view content on TV, the web or mobile platforms.

It also said that Comcast’s E! brand could get visibility on NBC and Telemundo.

The second study dismissed objections by consumer groups and some Hollywood unions that the NBCU could hamper the internet’s growth as an alternative distribution platform for delivering TV and film programs.

Consumer groups have expressed concern that Comcast could take content now being offered for free on sites like Hulu.com and make it available only to cable subscribers.

“The proposed transaction does not threaten competition in the distribution of long-form, professional quality video programming via the internet,” said the study, which also dismissed concerns that rival TV stations and cable companies who feature NBCU content and stations would be disadvantaged.

The second study said that web video is "complementary" to Comcast’s cable and NBCU’s broadcasting services and claimed Comcast would have "no incentive to attempt to weaken online video providers" by withholding NBCU content from rival providers.

It said if Comcast did so, NBCU would lose ad revenues and that Comcast had "only" a 24.8 percent share of the national cable provider market anyway.

The two reports were prepared by academicians. The economic analysis was written by Gregory L. Rosston, deputy director of the Stanford Institute for Economic Policy Research and a former FCC official.

The second report was done by Mark Israel, a former Northwestern University professor who now is senior vice president of Compass Lexecon, and Michael L. Katz, a former FCC chief economist and Justice Department official who is director of the Institute for Business Innovation at the University of California in Berkeley.