A merged Comcast-NBCU would wield so much market power that smaller multichannel service providers like WOW would be forced to carry new programming services from the company if it wanted to distribute popular Comcast- or NBC-owned networks, Abdullah said at a Federal Communications Commission (FCC) hearing on the proposed merger Tuesday. That would limit their ability to spend on infrastructure upgrades, which in turn would impede everything from the performance of its high-speed Internet service to the rollout of new interactive TV services, Abdullah contended.
“People are constantly requiring more speed. That takes money. That takes bandwidth,” Abdullah said at the FCC hearing. [Ed. note: WOW, by the way, indicated earlier this year that Docsis 3.0 network upgrades are underway.]
“It’s financial, and you have to manage your bandwidth approach. That’s why many of us are going to an all-digital platform, or a hybrid platform -- you have to be constantly looking at ways to increase your bandwidth so you can increase speeds so you can put on [additional] HD services, you can provide advance two-way interactive services,” she noted.
Comcast, she claimed, is already using its market power to prevent WOW from striking deals with programming networks that would allow it to launch a TV Everywhere service similar to the MSO’s Fancast Xfinity TV, Abdullah said, reiterating a claim she made during a House hearing in February. Since then, however, WOW has made some progress on its own by making Hulu LLC content available on its customer portal. (See Comcast CEO: We Won’t Block Rivals and WOW Plugs In Hulu .)
A merged Comcast-NBC could also force rivals to pay exorbitant retransmission consent fees, since it would have the leverage that comes with controlling 20 cable networks, 10 NBC owned-and-operated stations in the biggest markets, and nine regional sports networks, Abdullah said.
That sentiment was echoed by American Cable Association (ACA) outside counsel Tom Cohen, who also noted that a merged Comcast-NBCU would control NBC-owned stations and Comcast regional sports networks in areas representing 12 percent of all TV households.
Harm up and down?
Combining Comcast and NBCU’s programming assets alone would create “horizontal harm,” Cohen said. “The combined owner of NBC and Comcast programming would increase market power and allow it to charge higher programming fees. Those increases would be substantially passed on to subscribers in the forms of higher subscription prices.”
Comcast-NBC, he said, would also cause “vertical harm” in its ability to use its ownership of local TV stations and regional sports networks to charge higher retransmission consent fees to rivals such as DirecTV Group Inc. (NYSE: DTV), Dish Network LLC (Nasdaq: DISH), AT&T Inc. (NYSE: T) U-verse TV, and Verizon Communications Inc. (NYSE: VZ)’s FiOS TV.
Northwestern University School of Law professor James Speta was the only witness that said he didn’t oppose the merger, noting that the deal is “an appropriate response to a marketplace in complete turmoil.”
Also worth noting from Tuesday afternoon's hearing:
— Steve Donohue, Special to Light Reading Cable