ACA Calls for Comcast Antitrust Investigation & Trump Weighs In
The American Cable Association, a group that represents the interests of independent cable operators and several competitive cable overbuilders, has asked the US Department of Justice to open an antitrust investigation into Comcast's ownership of NBCU.
The American Cable Association (ACA) 's request was made via this November 6 letter (PDF) to Makan Delrahim, the U.S. Department of Justice 's Assistant Attorney General for Antitrust. The ACA wants the DOJ to probe the business practices of Comcast and NBCU and focus on what it views as "harms stemming from the dominant communications firm's control of cable systems, TV stations, and regional sports networks (RSNs) concentrated in some of the largest local markets in the country."
The ACA also held that the Comcast Corp. (Nasdaq: CMCSA, CMCSK)/NBCUniversal LLC merger and NBCU's big presence as a local broadcaster and its ownership of important regional sports networks, poses a greater threat than AT&T Inc. (NYSE: T)'s acquisition of Time Warner Inc., which is facing an appeal by the DOJ. (See FCC Gives DoJ a Boost in Appeal Against AT&T-Time Warner Merger and DOJ Says Judge Erred in AT&T-Time Warner Merger Appeal .)
The ACA's letter arrives just weeks after the conditions originally imposed on the Comcast-NBCU merger expired on September 1, 2018. Those remedies, originally set in 2011, generally were focused on putting constraints on Comcast/NBCU that would protect the emerging OTT video marketplace. The DOJ reportedly told Comcast in mid-August that the organization would continue to monitor the company's behavior, particularly concerning how it handles programming deals and the distribution of TV content. (See Comcast Clinches NBCU Deal.)
Comcast called the ACA's letter and the call for a DOJ investigation "meritless" and "constitutes an inappropriate attempt to gain leverage in the commercial marketplace."
"The video programming and distribution markets are incredibly competitive," Comcast said. "New programmers and distribution platforms are offering consumers increasing choices on what and where to watch. At Comcast NBCUniversal, we are competing in this dynamic environment the way we always have -- by continuing to innovate and conducting our business in compliance with antitrust laws and other legal requirements."
Comcast also pointed out that the company has integrated OTT services such as Netflix and YouTube to its X1 video platform and that NBCU continues to license content various OTT and traditional providers. (See Amazon Prime Video to Stream to Comcast's X1 Boxes.)
ACA's request also comes almost a year after Sen. Richard Blumenthal (D-Conn.) urged Delrahim to renew the investigation into Comcast and NBCU ahead of the expiring merger conditions and "consider separating" them if that probe determined that the combo was anticompetitive.
The ACA argued that monitoring Comcast and NBCU isn't enough. An "unleashed" Comcast/NBCU, free of the remedies tied to the original merger-related decree, will cause harm to both consumers and rival companies, the organization claimed.
"While monitoring by DOJ is certainly a step in the right direction, such a passive approach is unlikely to be effective against a sophisticated, giant firm like Comcast-NBCU," ACA stated in the letter from organization president and CEO Matthew Polka. "And, smaller rivals in particular will have great difficulty in trying to recover from any harms that Comcast-NBCU inflicts while the monitoring is in process."
By opening a formal investigation, the ACA argued, the DOJ will have the "ability to collect sufficient information to determine whether Comcast-NBC is acting anticompetitively."
President Trump, who has had his share of battles with NBC, seized on the opportunity to call attention to the ACA's request.
American Cable Association has big problems with Comcast. They say that Comcast routinely violates Antitrust Laws. "These guys are acting much worse, and have much more potential for damage to consumers, than anything AT&T-Time Warner would do." Charlie Gasparino— Donald J. Trump (@realDonaldTrump) November 12, 2018
Trump also was not a fan of the merger of AT&T and Time Warner, which, before that deal, owned CNN. When Democrats take control of the US House, they intend to investigate the Trump administration's attempt to block that deal, Representative Adam Schiff told Axios.
— Jeff Baumgartner, Senior Editor, Light Reading