WGAW, Consumer Groups Warn of Comcast-NBCU ‘Behemoth’

But on the last day for initial comments, Directors Guild touts the merger for creating jobs

The Writers Guild of America, West, joined consumer groups on Monday in urging the Justice Department and the Federal Communications Commission to reject Comcast’s $30 billion deal for NBCU — even as some competitors asked that strong conditions be imposed on the deal.

“Because the proposed merger of Comcast-NBCU will upend the media and internet markets as we know them, we oppose this merger as it stands today,” said a letter sent to the Justice Department and the FCC and signed by the WGAW, Bloomberg LP, Common Cause, Communication Workers of America, WealthTV, the National Consumers League, the Media Access Project, Free Press and Public Knowledge.

Warning that the Comcast-NBCU combination creates a “behemoth,” it claimed, “The merged entity will exert a degree of market power unrivaled in our nation’s media history.”

The letter was among more than 2,200 that arrived on the last day initial comments could be filed. Replies to initial comments can be filed through July 21; responses to the replies can be filed through Aug. 5.

Comments came in bulk on both sides of the issue. Indeed, while the WGAW expressed concern about the deal, the Directors Guild of America suggested the deal would produce jobs.

“Too little focus has been placed on the issue of jobs maintenance and creation,” said a filing from Jay D. Roth, national executive director at the DGA. “In a time when the industry is facing financial pressure from all sides, we expect Comcast’s commitment to grow the industry, infuse new capital into the entertainment business and invest additional resources into programming.”

The WGAW and consumer groups were not so optimistic.

The groups said that with the merger, Comcast will “have the means and the incentive to prevent the success of independent programmers” and would likely do so.

“Comcast will have every reason to undermine the many independent news, sports and entertainment channels that compete with the channels it owns,” the groups said, warning that the discrimination could be in channel placement, unfair negotiating practices or refusal to carry independent channels.

The letter also questioned the impact of the merger on internet video, cable pricing and news coverage.

“What is completely predictable is that a company of this size will be able to exert an unhealthy degree of influence over the media landscape absent strong efforts to limit that control.”

In a separate filing with the FCC, the WGAW said it was concerned about the deal’s impact on content creators — especially its potential effects in determining the value of content and in adding even more integration to an already concentrated industry. 

The union pointed to Comcast’s previous citing as a benefit of the deal an ability “to ameliorate the negotiation friction” that has made it difficult to obtain content.

“The ‘negotiation friction’ between independent parties is what determines the fair market value of the content,” the union said. “Eliminating this friction will allow only one party to decide the value of content.”

The WGAW also urged the FCC to impose limits that bar Comcast from discriminating against web video programming produced independently.

In other comments:

–NBC’s Television Affiliates group urged the FCC to impose a series of conditions on the deal to prevent Comcast from migrating NBC sports content to cable for seven years, from using its new weight in setting the terms of affiliation and other business agreements or to start providing the NBC network on cable without going through local stations. 

— The Parents Television Council, the American Family Association and Focus on the Family urged the FCC to require that Comcast disclose earnings from distribution of “pornographic” or adult-themed pay channels and bar Comcast from using public airwaves for similar programming.

—  The American Cable Association, which represents smaller cable companies, warned that the merger would give Comcast the means to drive up pricing and make it difficult for smaller competitors who need access to NBCU stations and programming to compete.

“No matter how you view it, the end result is that consumers will end up paying more for programming, if more conditions aren’t imposed,” said Ross J. Lieberman, the group’s VP of government affairs, at a press conference announcing the filing.

He said Comcast could use its bundle of 10 stations and 20 cable networks to wield negotiating power and force rivals to pay far higher retransmission fees or access fees.

Matthew M. Polka, the group’s president, said, “Consumers who will be forced to pay higher fees and take additional programming they don’t want to pay for.”

Comcast also got some support including from the mayors of Los Angeles, San Francisco and Baltimore.

In a blog filing, Comcast executive VP David L. Cohen said Comcast stands ready to address legitimate concerns, but some groups filing seem to trying to use the deal approval process to extract concessions outside of normal marketplace negotiations.