Comcast Critics Say Court Decision Is Only Partial Victory

Critics of merger say ruling won't alleviate other harms

By John Eggerton -- Broadcasting & Cable, 3/12/2010 1:05:04 PM

Reaction was swift around Washington to the news that a D.C. Federal Appeals Court had declined to overturn the FCC's decision to re-authorize the program access rules, which had been challenged by Cablevision and Comcast.

Critics of Comcast's proposed joint venture with NBCU were quick to argue the FCC victory was far from a laurel to rest on.

The American Cable Association, for one, said that it was glad the court didn't throw out the rules, but that the bigger problem is that even those rules are not sufficient to curb price discrimination.

"While we are pleased that the court recognized today that the FCC had substantial evidence to conclude that vertically integrated cable companies have the ability and incentive to withhold ‘must-have' programming from competitors, we maintain that the current program access rules are demonstrably ineffective for competitive pay-TV content buyers because they permit rampant, unjustified price discrimination," said ACA President Matt Polka in a statement.  "Moreover, the rules fail to provide for an automatic right to continued carriage during the pendency of a complaint and do not offer any rate-setting mechanisms. For these reasons, ACA asserts that program access rules will not alleviate the substantial harms that would result from the Comcast-NBCU merger, and that structural or behavioral remedies must be put in place by the Federal Communications Commission and the Department of Justice before that deal is approved."

Free Press Policy Counsel Corie Wright called the win a "short-lived" one. "If Comcast acquires NBC-Universal, the conditions of market concentration that prompted the FCC to extend this rule will be substantially worsened and warrant even greater scrutiny," said Wright.  "The program access rules are flawed, but they are better than nothing. The FCC should consider extending the exclusive contract ban once it expires." 

The rules expire in 2012. The court majority, while finding the FCC had not been arbitrary and capricious in deciding to extend them for another five years back in 2007, said it thought it likely the rules would no longer be necessary the next time around, given the growing competition in the multichannel video marketplace.