ACA, Consumer Groups Rip Comcast-NBC Merger

Reps for small cable MSOs, indie programmers, and consumers attack proposed marriage, but offer few conditions for regulators to chew on

February 3, 2010

3 Min Read
ACA, Consumer Groups Rip Comcast-NBC Merger

Groups representing small cable operators, independent programmers, and consumers teed off on Comcast Corp. (Nasdaq: CMCSA, CMCSK)’s proposed merger with NBC Universal today, but proposed few conditions that they’d like to see regulators place on the deal.

The groups contend that the mega-merger would see small cable operators pay higher fees for programming, limit the ability for small cable networks to get distribution on Comcast, and thwart consumers' ability to tap Internet video sites and "over-the-top" platforms for entertainment. (See Comcast to Take Control of NBC Universal, Comcast-NBCU: More Than a Pipe Dream? , and Comcast-NBCU Union Under Fire.)

Asking for conditions that would allow networks to cut deals with over-the-top video providers like Roku Inc. , WealthTV counsel Kathleen Wallman complained that Comcast’s carriage deals contain clauses that prevent networks from distributing content through over-the-top outlets. (See Roku 'Store' Opens With 10 Channels .)

American Cable Association (ACA) president Matt Polka said he wouldn’t oppose the merger, which will be reviewed at separate House and Senate subcommittee hearings on Thursday. But he expressed concerns that the merger would drive up programming costs for small operators, especially as it relates to sports programming.

Comcast’s strategy of allowing subscribers to access content from their cable subscriptions on its Fancast Xfinity TV site also came under fire, with Communications Workers of America (CWA) telecommunications policy director Debbie Goldman insisting that a combined Comcast-NBCU should be prevented from “bundling content over the Internet.” (See Comcast's 'Xfinity' Goes Live and Comcast to Expand 'Xfinity' to DSL Subs.)

Also worth noting from the conference call with reporters Wednesday, which also featured Free Press policy counsel Corie Wright and Media Access Project president and CEO Andrew Schwartzman:

  • Schwartzman, who will testify Thursday, said he believes regulators should block the merger. “Comcast will be able to leverage its program content anti-competitively from MVPDs" (multichannel video programming distributors). He also said a combined Comcast-NBC would “make it impossible” for new services like Roku to get off the ground.

  • Polka said the merger would give Comcast too much power to force small cable operators to pay for broadcast programming from NBC and Telemundo. It also concentrates too much control locally, noting that in Chicago, where ACA member WideOpenWest Holdings LLC (WOW) competes with Comcast, the company would own a regional sports network, an NBC owned-and-operated station, and online programming assets.

  • The merger would allow Comcast to cut “sweetheart deals” with networks that it owns, like The Golf Channel, Versus, and E! Entertainment, while forcing smaller operators to pay hefty fees for those same networks, Polka said.

  • Wright, from the Free Press, said “nothing good” will would come from the merger for consumers, maintaining that it would lead to higher cable rates and bad customer service.

Comcast CEO Brian Roberts and NBCU president and CEO Jeff Zucker are scheduled to defend the merger Thursday morning before the House Subcommittee on Communications, Technology, and the Internet. That will be followed by a grilling in the afternoon by the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights.

Comcast executive vice president David Cohen wrote in a blog post today that Roberts and Zucker will detail how they believe the merger will benefit consumers. He also insisted that Comcast isn’t looking to convert NBC and Telemundo from over-the-air broadcasters to cable networks.

“We've pledged not to do that (specifically stating our goal to preserve free, over-the-air broadcast television). We want to preserve the local broadcast affiliate model and work with the affiliates of NBC and Telemundo to secure a viable future for the network and affiliates alike,” Cohen wrote.

Comcast also defended the merger last week in a filing with the Federal Communications Commission (FCC) . (See Comcast: NBCU Deal Won't Kill Web TV Players .)

— Steve Donohue, Special to Cable Digital News

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