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Cable/Video

Policy Watch: Critics Pound Comcast-NBCU Deal

The Federal Communications Commission (FCC) docket filled up with more than 30,000 filings this week as Thursday's deadline for comments on the proposed Comcast Corp. (Nasdaq: CMCSA, CMCSK)- NBC Universal deal approached. (See WOW: Comcast-NBCU Menaces Service Rollouts, Web TV Takes a Crack at Comcast-NBCU Union , and Comcast to Take Control of NBC Universal.)

As expected, several from public interest groups and Comcast competitors called for the deal to be rejected, while one cable group proposed a laundry list of conditions. And, in case you're wondering, Comcast is still very much in favor of getting the deal done. Here's a snapshot:

  • The American Cable Association (ACA) isn't against the deal, but did outline a lengthy list of conditions it would like to see the FCC apply to the deal for a period of nine years in an effort to protect the interests of its constituents -- primarily small- and mid-sized MSOs

    One of the suggestions: The ACA wants Comcast-NBCU to be required to sell NBC stations and regional sports networks on a standalone basis, eliminating the possibility of bundling carriage for other networks. The group also wants Comcast-NBC to be prohibited from requiring any pay-TV operator with 125,000 video subs or less locally to pay a fee for an NBC station or regional sports net that is 5 percent greater than the lowest fee paid by any other local pay-TV distributor, including Comcast.

  • Free Press , the Media Access Project (MAP), and the Consumers Union of U.S. Inc. and other public interest groups filed comments rejecting the deal, arguing that it would hurt consumers and competition. And, unlike the ACA, they don't think applying strict rules on the deal is enough.

    "Our review of Comcast's internal business-planning documents confirms what we said in our original petition. It shows that the goal of this transaction is to use NBCU’s content to extend Comcast’s market power into the Internet space," said MAP SVP and policy director Andrew Jay Schwartzman. "There are no conditions which can ameliorate this problem; the Commission should reject the proposed deal.”

  • Comcast competitor DirecTV Group Inc. (NYSE: DTV) also rejected the deal, claiming it would lead to higher programming fees and enable the merged entity to "exploit an online loophole" by blocking access to some content while shifting access to the Web, on-demand, and on mobile platforms.

  • Comcast put in its last word, as well, replaying its argument that the deal will not result in jacked up programming fees or the blocking of access on the Web or through other channels, and reiterating its range of commitments, including the launch of independent channels in which Comcast or NBC hold no stake. (See Comcast CEO: We Won’t Block Rivals.)

    Comcast EVP David Cohen answered deal critics on the MSO's blog, holding that the credibility of "apocalyptic predictions" related to the deal "is thoroughly undercut by today's dynamic competitive media marketplace."

    He also cut down claims that the size of the deal is unprecedented, presenting a chart showing that the value of the Comcast-NBCU transaction ($30 billion) ranks ninth compared to the value of other deals at the time they were announced. The biggest: AOL-Time Warner Cable ($165 billion), followed by AT&T-BellSouth ($67 billion), SBC-Ameritech ($62 billion), and AT&T-MediaOne ($58 billion).

    Other regulatory items of note that are not related to the Comcast-NBCU deal:

  • Carriage negotiations between Time Warner Cable Inc. (NYSE: TWC) and Disney are getting so heated that ESPN president George Bodenheimer and head of sales and marketing Sean Bratches were told to cut short their vacations and to help Disney with its wheeling and dealing with the MSO, the New York Post reports, noting that ESPN, the most expensive cable network of the lot, gets an average of $4.40 a month per subscriber.

  • The ACA argued this week that boosting pole-attachment fees will result in higher broadband costs and do harm to rural consumers. It's glad that the FCC is looking to revise pole-attachment regulations, but stressed that ACA members "need to access poles at low and stable prices in order for the price of high-speed Internet access to remain affordable for all consumers." The ACA also wants the FCC to preserve a "sign and sue rule" that allows a cable attacher to execute a pole-attachment agreement with a utility and then later file a complaint. (See ACA Seeks Stable Pole Attachment Fees.)

    — Jeff Baumgartner, Site Editor, Light Reading Cable

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