Comcast/NBCU Deal Gets Boost From Broadcast

Trust-but-verify retrans side deals pave way for support

Why This Matters

Overseas Fees For Operators?

If a powerful senator gets his way, cable operators could be hit with an extra few hundred million dollars in phone charges courtesy of the U.S government. Talk about “bill shock.”

Sen. Chuck Schumer (D-N.Y.) has introduced a bill that would impose a 25-cent-per-call fee on any company that outsources customer service calls overseas. Given that many U.S. industries tap into the offshore call-center market, expect lots of dialed-in lobbying muscle against such a bill.

Then there’s Chad Lyne, director of corporate strategy for Denverbased Alpine Access, who is using Schumer’s proposed bill to help sell the cable industry on Alpine’s onshore alternative. Alpine is in discussions with two of the top 10 cable operators, according to Lyne.

Alpine Access has a cadre of at-home operators in the U.S. to answer calls, and while Lyne concedes that it is cheaper in the short term to outsource to India, the Philippines or Latin America, the cost could be going up by as much as $400 million industrywide if Schumer has his way, he says. Lyne also argues that it is pricier in the long term to outsource because offshoring can damage the brand and be more expensive in new-customer acquisition costs.

Lyne says larger cable operators tend to be “pretty heavy users” of offshore work. He says his company has run the numbers for cable and telcos, which he estimates send close to 1.25 billion calls overseas each year.
John Eggerton

AS THE FCC closed out its first round of comments on the Comcast/NBC Universal deal last week, some agreements Comcast struck with the major broadcasters seemed to help smooth the road toward eventual approval.

Petitions to deny came from expected sources, with Media Access Project, Free Press, Consumers Union and Consumer Federation of America saying there was no way the deal should go through no matter the conditions. But even opponents have said they expect the deal to be approved, likely with some conditions.

And the first round appeared to go to deal proponents. Affiliate groups representing all the major broadcasters said last week that they had struck informal agreements with Comcast that cleared the way for their support. Those included promises of retrans fairness, a key condition for both competing stations and the NBC affiliates that would be under Comcast’s wing.

NBC affils were the first to cast their lot with the deal. They said Comcast has promised to meet three key conditions: not to migrate must-have sports programming from free TV to cable, not to use affiliation renewals to retaliate for something that happened in retrans negotiations, and not to bypass stations with a direct-to-cable feed of network programming.

But while the NBC affils went so far as to say they’d welcome the merger, they were not ready to let Comcast’s promise substitute for more official guarantees. “While the [affiliate] Association and Comcast have had productive discussions and reached agreement on a number of matters pertaining to ownership of the NBC Television Network by Comcast,” said the affiliates in their official comments, “the three risks identified herein raise unique concerns for the future of the network-affiliate partnership and the public it has served so well for so long. The Association therefore believes that the Commission, and not just private agreement, should govern enforcement of measures to protect against these risks.”

Ditto the ABC, CBS and Fox affiliates, which came to agreement with Comcast over several retrans-related conditions but also said these must be incorporated into “binding conditions” in the FCC order. The conditions ensure Comcast will negotiate “at arm’s length” and “in good faith” with non-NBC affils, and that it will take no technological moves to favor those owned stations.

For commenters who have not struck any deals with Comcast, and those who don’t have a middle ground on which to compromise, the issue of access to online programming took center stage. Some were looking to use the FCC vetting process to impose network neutrality-like access and nondiscrimination conditions on the company.

Public Knowledge put the strongest spotlight on the issue. It argued that the public interest requires the FCC to look beyond competition in “mature markets” like traditional video to competition in an emerging market like online video, especially since online video is in its infancy.

And in a meeting with FCC staffers, DISH combined a pitch for network neutrality rules with a warning that Comcast would be able to “degrade or block” the video content of competitors—the boilerplate phrase in calls for network nondiscrimination.

E-mail comments to jeggerton@nbmedia.com and follow him on Twitter: @eggerton