The Department of Justice has launched a probe into whether Comcast’s role in the “spot” cable ad sales market hinders competition and violates antitrust law, The Wall Street Journal reported Tuesday.
The investigation, the paper said, centers on “monopolization or attempted monopolization” of the spot cable ad-sales business, which is largely driven by the MSO’s Comcast Spotlight unit.
“We plan to cooperate fully with the Department of Justice’s inquiry,” Comcast said in a statement.
The U.S. ad market, Comcast added, “is robustly competitive, and advertisers have never had more choices to reach consumers. Local cable advertising competes with local broadcast TV, radio, newspapers, outdoor display, and the rapidly growing digital marketplace. All multichannel-video providers – or MVPDs – account for only about 7% of local advertising sales.”
Comcast also pointed out that MVPDs have tried to achieve scale, lower costs, and compete in the local ad sector with local interconnect deals. “We believe these long-standing industry practices are good for advertisers and consumers, and we and other MVPDs are continuing to provide these important services to our clients.”
Comcast’s position in the local spot cable market came up during its failed pursuit of Time Warner Cable. While that proposed deal was being vetted, cable ad sales company Viamedia argued that the combination of ad sales distribution, technology and data would give them "absolute control" of the spot cable and other cable ad markets.
Viamedia reportedly lost business when former partner RCN picked Comcast Spotlight to handle its local ad sales in several markets, and, per the WSJ, Wide Open West also recently struck a deal with Comcast Spotlight that becomes active starting next year.
When it spoke out against the proposed Comcast-TWC deal, Viamedia claimed at the time that the combination stood to control $4.5 billion out of the $5.4 billion spot cable market, and called for conditions that would insure that NCC Media interconnects were independently managed. NCC is jointly owned by Comcast, Cox Media and Time Warner Cable, and has a several “affiliates” that include AT&T U-verse, Buckeye CableSystem, Cable One, Cablevision Systems, CenturyLink, DirecTV, Dish Network, Grande Communications, Verizon FiOS, RCN, Viamedia, and WOW.
Comcast argued then that it allows other MVPDs to weave into the NCC interconnects, but Viamedia countered that the operator does not allow such participation for some MPVDs if they also use third parties such as Viamedia for spot cable.