Small cable companies are promising to push hard for major conditions before Comcast and NBC Universal can move forward with their merger.
Steve Friedman, chairman of the American Cable Association, says the trade group for smaller cable systems is concerned that the deal will put them at a significant negotiating disadvantage. Smaller cable systems already feel they pay unfairly high prices to retransmit major network TV outlets compared to bigger systems.
Friedman, who is also COO of Wave Broadcasting in Kirkland, Wash., offered the pledge Tuesday as the group’s opened its annual Washington, D.C., summit.
The group told the Federal Communications Commission recently that the deal would reduce or eliminate the incentive for NBC stations to negotiate for retransmission and regional sports networks in areas where the smaller systems compete with Comcast. It also warned that Comcast controlling NBCU could lead to higher cable prices.
“By controlling a much larger block of highly demanded programming, the merged entity will be able to charge much higher programming fees,” the group told the FCC.
“All programmers, including NBC, use the threat of withdrawal of programming as a lever to negotiate higher programming prices [from cable operators]. Comcast’s combination with NBC reduces the cost to the merged entity of withdrawing programming from rivals of Comcast cable. As a consequence, Comcast will be able to bargain for higher programming prices for programming previously owned by NBC than NBC would otherwise.”
Friedman on Tuesday reiterated the concerns and promised to lobby aggressively with regulators.
“Over the next year ACA will play a leadership role in the fight for fairness and appropriate conditions on the Comcast-NBCU merger,” he said.
“Without reasonable regulatory constraints, this integration of NBCU with the programming of Comcast is a threat to consumers and competition.”
Officials of the group said they held a “cordial” meeting with Comcast in February and subsequently two meeting with Department of Justice officials reviewing anti-trust aspects of the deal; and one with the FCC, which is reviewing “public interest” issues in the deal.
They declined to discuss details of the Justice Department meeting.
The American Cable Association has been careful in saying it doesn’t oppose the deal — and instead wants conditions placed on it.
ACA president-CEO Matthew Polka today also said that he was hopeful the controversy over Cablevision dropping WABC-TV earlier this year along with other retransmission consent negotiation problems, would finally prompt the FCC to step in, at least to impose some minimum requirements for consumer “notice” before local broadcast stations can pull their signals from cable systems.
A Comcast spokeswoman declined comment on the remarks.