Study: NBCU-Comcast Merger Will Cost Consumers $2.4 Billion

Cable industry group commissions study that Comcast calls “flawed”

Last Updated: December 3, 2010 @ 2:54 PM

A cable industry trade group says consumers will pay at least $2.4 billion more for cable service over the next nine years as a result of "unrestrained pricing power" from the Comcast-NBCU merger.

The merger, which is awaiting federal approval, also runs the risk of “crippling effective competition in the pay-TV distribution market," said Matthew Polka, president and CEO of the American Cable Association, which released a study with the estimate on Monday.

The group, representing small and medium-sized cable companies, commissioned the study by Dr. William Rogerson, a professor of economics at Northwestern University who served as chief economist for the Federal Communications Commission in the late 1990s.

A combined Comcast-NBCU would be able to raise programming fees well beyond what they would separately, and the hikes will hit consumers in the form of higher subscription prices, according to the study. Rogerson said the quantifiable consumer harm of the transaction — an estimated $2.566 billion — is more than 10 times the quantifiable consumer benefit claimed by Comcast-NBCU.

"Once again, ACA has submitted flawed economic analysis," Comcast said in a statement. "It relies on assumptions and calculations that are unsupported, directly contradicted by available data, and contrary to previous FCC rulings."

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