“Extortion” and “distorted” are some of the strong words that Comcast is throwing out against critics of the proposed $45 billion union with Time Warner Cable.
In a 327-page filing with the FCC late Tuesday, Comcast defended the transaction, saying it “will produce substantial, verifiable public interest benefits” and “greatly expand the quality of communications services available” for millions of consumers and businesses.
The cable company also accused critics of making the same “speculative and distorted” claims they have for years about Internet and cable providers, saying many of them only offer support for the deal out of “self-interested requests.”
If the company had agreed to all of these requests, its programming costs would have jumped more than $5 billion, the filing claimed.
“The significance of this extortion lies not just in the sheer audacity of some of these demands but also the fact that each of these entities has all but conceded that if its individual business interests are met, there is no concern about the state of the industry, supposed market power or harm to consumers,” Comcast said
Comcast denied that the TWC deal would allow it to use its control of NBCU’s cable and TV station programming to disadvantage rival video providers.
“Comcast’s video programming do not begin to reflect market power as a programming seller,” the company said. “Were Comcast to withhold NBC Universal content from a competing [company], many viewers would simply watch alternative programming rather than switch to Comcast.”
Adding that the result of a “risky and uncertain strategy” like that could be loss of subscribers and revenue.
The lengthy filing quickly sparked reaction from other companies, with Eric Sherman, CEO of health and wellness network Veria Living, saying: “All we have ever asked for is a level playing field for all programmers and a chance for all networks to get their messages to consumers. For a giant like Comcast – which is about to control 28 of the nation’s top 30 markets — to accuse us of extortion is absurd.
“The FCC and Congress invited independent programmers to share with policymakers their frustration with Comcast as part of the merger review process. We have done that in an open and honest manner, providing testimony and talking with regulators on the record,” argued Sherman. “We speak for consumers when we argue that Comcast should be required to provide a clear, transparent and fair route for independents to be considered for carriage. That has not been the case.”
As for Comcast, it also that denied contentions of consumer groups, Netflix and other Web video providers that the deal would give the combined company too much power over the Web. “There is no plausible reason to conclude that the transaction will increase Comcast’s incentive to harm or degrade its broadband service,” said the company statement.
While services like Netflix compete in certain respects with Comcast’s cable system content, they provide “enormous contribution to the Internet ecosystem central to Comcast’s Internet access system,” it assured. “It is firmly in Comcast’s interest to meet its customers demand by providing the most attractive Internet access to any content.”
Comcast denied it was unfairly charging Netflix for Internet connections. “In reality, Netflix was the one trying to game the system to reduce its transit costs and push those costs onto Comcast’s broadband customers,” said Comcast, along with denying further claims from operators of various cable channels including Bloomberg, TheBlaze and Tennis Channel that it was operating unfairly.
Comcast said the new deal “will provide the combined company with the greater scale and synergies essential to continue to invest in and upgrade its networks, innovate, and compete more effectively against the growing number of communications, media, and technology providers with national and global scale.
“This, in turn, will spur greater competition, investment, and innovation by other providers.”
Comcast added that any net neutrality concerns about cable systems disadvantaging their rivals aren’t transaction specific and should be dealt with separately by the FCC.