Smith: Comcast/NBCU Conditions Likely

Rep. Buyer says FCC should look at impact merger will have on multiplatform and ad models

By John Eggerton -- Broadcasting & Cable, 12/15/2009 12:37:47 PM

Indiana Republican Steve Buyer took aim at the Comcast/NBC deal during a hearing on spectrum inventory and auction/reallocation bills Tuesday, saying the committee needs to see over the horizon at "the impact that this type of merger is going to have on a multimedia platform and advertising model." National Association of Broadcasters President Gordon Smith said some of his members had concerns as well.

Smith, who was a witness at the hearing, said some of his members have been calling with concerns about the impact on retransmission consent of the proposed Comcast/NBCU merger.  He thought it was likely there would have to be government conditions on the merger if it is to go through.

"I think we should take a really good look here at Comcast/NBC," Buyer told Committee Chairman Rick Boucher (D-Va.), before turning to Smith to press him on the issue. Boucher has already said there would be at least one hearing next year, and reiterated that to Buyer.

Buyer said he had concerns about broadcasters, consolidation and what kind of new business model the merger would represent. He said his concern included that there would be a new advertising model for all the new multiple programming delivery platforms and the ability to "mine and profile" people for targeted advertising purposes, not only on the web but potentially TV.

Buyer said having a distributor the size of Comcast be able to control content, "it

almost turns the present business model inside out."

Smith said he had members for the deal and others "very concerned about it." The issue is one that potentially divides his network and non-network members, a point he alluded to. "We have networks and affiliates. They have most issues in common, but this is one where there needs to be an accommodation, an understanding and a legal structure put in place that allows both to survive."

"The NAB has not taken a position on this juncture," he said. "We are simply going to watch and see what kind of conditions develop."

Buyer talked about the need for media diversity. He asked whether Smith could relate to the concerns of station owners about retransmission consent fees and what impact the deal could have on that, and on others subject to "cost shifting" by virtue of vertical integration.

Smith said his phone has been ringing frequently with calls from members concerned with retrans and other issues. "But I assume the FCC, the FTC and the Department of Justice will look at all these things and propose conditions if this is to go forward at all. At this juncture it is the feeling of the association that we should allow the process to work."

Buyer said that his concern was confirmed by what he called "the silence."

"When there is silence in the marketplace because of this type of deal," he said, "that tells me there is great concern in the marketplace and fear that, if in fact, a company were to come out against this type of merger, what type of repercussions would occur." 

While a lot of member companies may confide in that phone call with you, there is a reason that they are not coming out publicly because they don't want to come out publicly because they don't want to get jammed in their negotiations."

I think they are very interested observers in this process and share the concerns you have expressed," said Smith.

"The gentleman is quite right in expressing the need for us to focus on this very carefully," said Boucher, "and it is certainly our intent to do so."