WoW! Says Whoah: Pitches Strong Comcast/NBCU Conditions

Abdoulah says Justice will need to prevent merger from "beating the system"

By John Eggerton -- Broadcasting & Cable, 2/3/2010 9:54:10 AM

Colleen Abdoulah, president of cable/ISP WOW!, plans to tell a Capitol Hill audience that the FCC and the Justice Department will likely need to put serious conditions on the Comcast/NBCU merger to prevent it from "beating the system" and engaging in anticompetitive conduct, according to a copy of her testimony for the Feb. 4 hearing in the House Communications & Internet Subcommittee.

Speaking for the American Cable Association as well as her own company, Abdoulah argues that the current program access rules are essentially a "right without a remedy," and that the government must consider structural relief--like forced divestitures--in addition to as various "behavioral" remedies.

She says that rather than being a primarily vertical deal, as the companies argue, it "greatly increases" horizontal concentration by combining "key content and distribution assets" of the two.

Comcast/NBCU have volunteered a number of conditions related to access, program diversity and nondiscrimination, but Abdoulah argues the concessions are superficial and "provide neither material certitude of program access nor assurance of a level playing field."

Comcast/NBCU argue that their broadcast and cable assets are separate spaces, pointing out that there is no cable substitute for a network affiliated station, for example.

Among those remedies: nondiscriminatory rates and terms for all Comcast/NBCU content, on air, on wire or online; prohibitions on bundling, tier or penetration requirements; and third party arbitration and review for any program access complaints.

But Abdoulah does leave a path for approval of the deal. "If the federal agencies address the grave potential harms with robust relief...incumbent entrepreneurs will expand their businesses and new ones will rush into the market - all to the benefit of American consumers."