From the concession stand

Competitors tell FCC what AT&T, Comcast should do to gain right to merge

Business rivals of AT&T and Comcast last week posed a list of conditions they want the FCC to impose in return for approving the two companies' merger.

Despite the hectoring of competitors, however, the $72 billion merger is expected to clear Justice Department and FCC review with little difficulty because the deal does not violate antitrust guidelines or diminish consumer choice in any individual market.

Comcast President Brian Roberts and AT&T Broadband Chairman Michael Armstrong defended their deal before the Senate Antitrust Subcommittee two weeks ago. The merger would make AT&T/Comcast the country's largest multichannel company, with 22 million wholly controlled subscribers.

In comments due to the FCC last week, competitors and critics are trying to make things difficult.

EchoStar, seeking approval of its own mega-deal with DirecTV, called on the FCC to close a "loophole" allowing Comcast to deny DBS access to some regional sports nets. EchoStar also couched its deal as a necessary counterweight to compete with the "veritable colossus" AT&T/Comcast would become.

Comments ranged from those of the Progress & Freedom Foundation, which promotes deregulation as the best way to bring new technology to customers and called on the FCC to approve the deal with no conditions, to those of 38 consumer groups and media watcdogs, asking the FCC to block it no matter what.

"The proposed merger of these two cable giants has enormous implications for the future health of our media culture," said Jeffrey Chester, executive director of the Center for Digital Democracy. "It will tilt the broadband playing field in such a way that the very hallmarks of the Internet—openness, competition, diversity—will give way to the closed, tightly controlled platform of cable. And that's simply too high a price to pay."

Most competitors' comments just picked at merger aspects that worried them. Verizon and Qwest insisted that favorable regulatory treatment for regional phone monopolies also would provide needed balance against the AT&T juggernaut and urged the FCC to OK the deal only if telcos' obligation to lease their broadband DSL lines to competitors is eliminated.

Cable overbuilder RCN said the merged company must be required to offer competitors its affiliated programming at "non-discriminatory" prices and prohibit exclusive deals between AT&T/Comcast and programmers. The American Cable Association, a group of mainly small cable operators, called on the FCC to make sure AT&T/Comcast distributes cable-network programming to small systems on reasonable terms and eliminates exclusive contracts that block some programming services from reaching small systems.

Petitioners to deny include Media Access Project, US Public Interest Research Group, and the Association of Independent Video and Filmmakers. They cited such dangers as consolidation of control over broadband architecture, personal data abuse, dominance of interactive set-top design, and abuse of market power to obtain stakes in cable programming and equipment manufacturers.