Public Interest Groups, Cable Ops, Unions Slam Comcast/NBCU Merger

Organizations raise "grave concerns;" call for tough conditions

By John Eggerton -- Broadcasting & Cable, 1/7/2010 12:27:58 PM

A group of more than two dozen organizations, including cable operators, advocacy groups and unions have joined forces to slam the Comcast/NBCU merger and call for tough conditions.

In a letter to President Barack Obama and members of Congress being sent Thursday (Jan. 7), the groups say they have "grave concerns" that the merger will have a "devastating effect" on the marketplace and give the merged company "unprecedented control" over new media outlets.  The letter, which comes just short of outright opposition to the deal, levels numerous criticisms before ending with the request that the government "take a hard look at this merger and take the necessary measures to prevent harm to both consumers and competition." Given the divergence of the group's members, that closing allows room for interpretation-outright opposition for some-or conditions so onerous that they kill the deal or, at baseline, tough conditions for others.

Comcast suggested the groups criticisms were a parade of horribles without substance. "Viewed objectively, the GE/Comcast NBCU transaction is pro-consumer and strongly in the public interest, and we look forward to making that case to Congress, the Justice Department, and the FCC," said Comcast spokeswoman Sena Fitzmaurice. "There is absolutely no evidence that this proposed transaction would produce any of the adverse effects these groups claim the deal would cause. In fact, existing law already prohibits any discrimination by Comcast against other providers regarding programming we own and would preclude Comcast from "prioritizing" NBCU channels. Further, the emerging online video market is extraordinarily competitive, with sites like YouTube, Netflix, iTunes and dozens of others already offering video from a wide range of content providers, large and small."

The letter hits most of the talking points-less choice, reduced competition, higher consumer costs-of many of the members' past criticisms of the deal. That group includes Free Press, Public Knowledge, Consumers Union, and Media Access Project. Earlier in the week they took aim at the online industry initiative TV Everywhere, saying the merger put an "exclamation point" on their concern about control of online video.

"The merged giant would have strong incentives to discriminate against other multi-channel video providers in granting access to its wealth of programming, including all of its broadcast stations and 'must-have' national and regional networks that air live or same-day sporting events, as well as the market power to enforce anticompetitive "bundling," they wrote. "The proposed deal could make it even harder for diverse and independent voices to find an audience, as Comcast would have the incentive to prioritize NBC channels and programs over others. Control of NBCU programming also would give Comcast the opportunity to prioritize its own online video products over those of its competitors - or sharply reduce online video distribution altogether - pushing independent producers out of the picture."

The groups branded "merely window dressing" Comcast's public interest proposals, outlined by Comcast Executive VP David Cohen in a memo released at the time of the deal.

They said that promises to extend program access rules to broadcast and HD programming would not mitigate the potential "danger" of vertical integration or get at the concern over online video distribution. "To prevent a disastrous impact on competition and consumer choice, any approval of the merger must include meaningful conditions that extend well beyond those previously imposed on less significant mergers."

"In its ads, Comcast and NBCU ask people to 'Dream Big' but small cable operators know this deal will be a nightmare for its millions of customers without appropriate conditions," ACA President Mattt Polka said.

The coalition's move was not a big surprise.

In an interview with B&C/Multi on the eve of the merger announcement, Polka, whose group represents about 900 smaller and midsized cable operators, signaled his group could have big problems with the merger. "I am sure that we will be working with other industry and consumer groups suggesting quite aggressively the harms to consumers that will result from this [merger]," he said at the time.

The letter comes a day after the Justice Department drew the long straw in deciding whether it or the Federal Trade Commission would review the merger. Comcast is expected to file the deal for review by Justice in the next few days.

The eclectic group, which includes those opposed to the deal outright and those who have suggested it needs major government conditions, comprises American Cable Association, Center for Media Justice, Common Cause, Communications Workers of America, Concerned Women of America, Consumer Federation of America, Consumers Union, Free Press, Kids First Coalition Media Action Grassroots Network, Media Access Project, Media and Democracy Coalition, Morality in Media, National Association of Independent Networks National Consumer League, National Organization for Women, National Telecommunications Cooperative Association, Organization for the Promotion and Advancement of Small Telecommunications Companies, Parents Television Council Public Knowledge, Satellite Broadcasting and Communications Association Sports Fans Coalition, U.S. PIRG, Writers Guild of America East, Writers Guild of America West.