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Regulatory Flags Raised at Prospect of Comcast-NBC Uni Deal

“When you have the largest cable operator buying one of the largest networks, you invite a public policy debate over everything.”

 

TheWrap’s report of Comcast’s possible purchase of NBC Universal has consumer groups in Washington sounding warnings about media ownership and the hazards of consolidation.
 
"When you have the largest cable operator buying one of the largest networks, you invite a public policy debate over everything,” said Mark Cooper, director of research for the Consumer Federation of America. “It’s a Thanksgiving feast of public policy issues.”
 
Among issues that would be raised are Comcast discriminating in favor of its own shows and cable channels, and using its new clout to bundle channels and programs in ways competitors can’t match.
 
"Clearly there is extensive evidence that network operators favor their own stuff,” Cooper told TheWrap.
 
But Cooper said he wasn’t surprised at the deal.
 
“It’s the problem of [Comcast] not being vertically integrated. They’ve spent years trying to build regional sports and news content in an increasingly national market. They must feel a deficit.
 
“They also know that they couldn’t pick up Time Warner because of the [anti-trust] implications in the cable market. Disney (which Comcast made an unsuccessful bid for in 2004) is unacquirable. Too big. NBC is a pure content play.”
 
FCC and FTC spokeswomen today declined comment on the prospect of the deal or any anti-trust implications. The Justice Department did not immediately return a call for comment.
 
As reported in TheWrap, Comcast is in talks to purchase 51 percent of NBC Uni from General Electric, with deal points hammered out at a meeting among bankers for both sides in New York on Tuesday.
 
Andy Schwartzman, executive director of the Media Access Project, a public interest law firm that has sued the FCC on media ownership consolidation issues, was another expert concerned about the merger.
 
“By simply saying ‘No’ to a competing network when it seeks cable carriage, they can leverage their control, Comcast can make it very difficult for independents to start new networks without giving Comcast an ownership interest,” Schwartzman told TheWrap.
 
“It creates a great diminution in the flexibility in the video program market,” he said.
 
Art Brodsky, a spokesman for Public Knowledge, a consumer group that has fought media consolidation, said another issue would be whether Comcast could give itself quicker access to video-on-demand from NBC, making it more difficult for NetFlicks or iTunes to compete.
 
And he also worried about net neutrality — whether Comcast, as an internet service provider, might give some video content a faster path to consumers’ desktops than other content. “It makes our arguments about what might happen without net neutrality more plausible,” he said.
 
W. Kenneth Ferree, president of the free market oriented Progress & Freedom Foundation, questioned the consumer groups’ worries.
 
“We again appear to be entering an era in which every proposed deal is viewed as an invitation for any group with a gripe to push for conditions, whether or not the gripe  has anything to do with the actual proposed combination of assets,” he said.
 
“All one has to do, it would seem, is to raise the specter of the ‘media consolidation’ boogey-man and Washington goes all a titter.