Thierer On Comcast/NBCU: The Sky Isn't Falling

Progress and Freedom Foundation pres says activist groups' concerns overstated
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Free market fan Adam Thierer, president of the Progress and
Freedom Foundation, says the "sky is falling" approach by some
activist groups to the Comcast/NBCU merger is overstated.

According to a copy of his testimony for a Feb. 4 House
Communications & Internet Subcommittee hearing on the proposed merger, he
takes aim at what he sees as a chorus of Peacock Littles, as it were, arguing
that rather than consumers or competing content providers, the only people in
any danger of getting hit by a piece of sky are the two companies themselves.

That's because such mergers don't always create the sort of
synergies and value (see AOL-Time Warner) the companies are aiming for.

Rather than the gloom and doom scenarios painted elsewhere,
Thierer argues that the deal may even be a model for how to sustain traditional
media.

Thierer argues that the "preemptive concessions"
the two companies have already made--they include commitments to making free
online content available and applying program access/carriage rules to retrans
negotiations--weaken the gatekeeper argument, and points out that after the
merger the "vast amount" of cable channels will still be owned by
somebody other than Comcast/NBCU.

He also suggests it would be economic suicide to restrict
content options since that would reduce the number of eyeballs, advertisers and
revenues.

He also argues that consolidation may be a necessary
response to the digital threat to traditional economic models. "Alliances
like Comcast-NBCU may be one blueprint for how traditional media operators can
evolve and compete going forward," he says. "With both the FCC and
FTC currently investigating whether journalism is in trouble and what it might
take to 'save the news,' many media economists and industry analysts seem to
agree that at least some degree of consolidation or collaboration might be
necessary."

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