FCC Gets Earful On Comcast/NBCU Impact

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Small cable operators, an independent programmer, and a former FCC
commissioner led the afternoon prodding of the Comcast/NBCU merger at
the agency's Chicago forum Tuesday.
Like the first panel of the
day -- on online access issues --
the participants were weighted toward
those with criticisms of the propsed joint venture.
The most
critical was Tyrone Brown, former FCC commissioner and president of
Media Access Project, though at times he seemed to come both to praise
and bury Caesar.
Brown gave Comcast/NBCU props as a "marvel of
enterprise," that had become successful through courage, vision and
toughness, something he said "I truly, truly admire." Brown said he was "very impressed" with Comcast and NBCU's
commitments to advance minority participation in the programming and
operations of the companies. He said that if they were made enforceable
conditions of the deal, they would be "clear plusses." He went as far to
say that in a close call, they would make him "sympathetic" to the
merger. Given MAP's strong criticisms of the deal to date, it almost
sounded like the beginnings of a big story.
But Brown also was
quick to take the bloom off that rose and replace it with a thorn. He
said with the play for NBCU, they "are going a couple of bridges too
far." He said that the combination of assets, particularly where Comcast-owned systems and NBC-owned stations, it would have the "market-moving"
power that it would deploy to the detriment of competing MVPDs and the
viewing public. Brown said he was also speaking as a sometime minority
entrepreneur
in the communications business.
He said
the "assured adverse impact" on the marketplace of ideas outweighed any
"less certain" benefits from Comcast's diversity commitments.
The
American Cable Association tag-teamed its challenge to Comcast, with
both Colleen Abdoulah, president of WOW!, and outside counsel Tom Cohen
weighing in (Cohen was subbing for economist William Rogerson).
Cohen
said that either way you look at it, as a horizontal or vertical
merger, the deal will cause significant harms. Abdoulah said if the deal
does not have strong conditions, "Comcast will have greater incentive
and ability to deny access and charge higher fees to WOW for NBCU's
broadcast stations and national cable networks, knowing that our
customers could become theirs. These harms also flow to online
distribution. We are concerned that Comcast will not grant us the rights
to allow our customers to view combined Comcast‐NBCU programming
online," she said.
Ken Solomon, who heads both Tennis
and Ovation, said if the deal were approved, has major concerns
about it. He noted that the FCC should require Comcast to treat affiliated and
non-affiliated channels equally, or justify to the FCC why that unequal
treatment is not based on affiliation.
Solomon also took aim at
Comcast's pledges of adding 10 nonaffiliated networks, saying that the
nonbinding commitments did not prevent Comcast from giving those new
nets minimal distribution on narrowly penetrated tiers with reduced
license fees or not fee at all, while charging a premium for it.
Brian
Lawler of Scripps, who heads the NBC affiliate association, outlined
the commitments Comcast made to them, but emphasized that the FCC would
need to make them binding conditions. Those include pledges not to
migrate must-have sports from broadcast to cable, keeping retrans and
affiliation negotiations seperate, and not bypassing stations with a
direct feed of network programming to cable operators.
He
reiterated that with those conditions set in regulatory stone, his
stations would support the deal.
At least one panelist did not come
with conditions in hand or a quiver full of criticisms. James
Speta, a professor at Northwestern University School of Law, which was
hosting the event, said he thought that despite the mergers size, he did
not think the FCC needed to rewrite communications law to review it,
saying it should be a pretty straightforward analysis dealt with through
an antitrust review, and that some of the larger issues about access to
programming and carriage could, and should be dealt with by the FCC in
general proceedings, rather than using the deal as the vehicle.
Speta called the proposed Comcast/NBCU joint venture an "appropriate and
interesting response to a marketplace in complete turmoil." He pointed
to some of the possible upsides of the merger, including for online
content delivery. The company might have less problems lining up legacy
rights to content. He also said that if the combination of programming
services results in more attractive bundles to advertisers, that is a
benefit, even if it forces competitors to find news ways to compete.

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