Joining a broad group of industry, labor and public interest organizations, the American Cable Association called for major conditions to the Comcast-NBC Universal transaction to ensure that the media giant can't inflict anticompetitive harms on small cable operators or injure consumers by imposing business models that both drive up prices and require the purchase of unwanted content available on cable and the Internet.
ACA and 24 other signatories expressed their concerns about the Comcast-NBCU transaction in a letter sent January 7 to President Barack Obama and members of Congress.
In addition to ACA, the group includes: the Satellite Broadcasting & Communications Association (representing DIRECTV and DISH Network), the National Telecommunications Cooperative Association and the Organization for the Promotion and Advancement of Small Telecommunications Companies (representing small telephone companies), Free Press, Consumers Union, and Common Cause (representing consumer interests) and others. The group reflects a cross section of interests committed to promoting the public interest and consumer welfare through thoughtful government oversight of market-dominant media companies.
In the letter, ACA and the others said: "The merged giant would have strong incentives to discriminate against other multichannel video providers in granting access to its wealth of programming, including all of its broadcast stations and "must-have" national and regional networks that air live or same-day sporting events, as well as the market power to enforce anticompetitive ‘bundling.'"
ACA expects to play an active role in the federal government's review of the Comcast-NBCU transaction, the most significant media deal to come under close government scrutiny in at least a decade.
"By taking control of NBCU, Comcast would become the country's most powerful online and traditional programming company with every incentive to raise prices, restrict choice and force operators to sell consumers content that they don't want in order to continue viewing programs they sincerely desire. In their ads, Comcast and NBCU ask people to 'Dream Big' but small cable operators know this deal will be a nightmare for millions of their customers without appropriate conditions," ACA President and CEO Matthew M. Polka said.
Comcast and NBCU announced their joint venture in early December, hoping to create the first major combination of a large cable provider and a national broadcast network in U.S. history. The $30 billion deal requires approval of the Federal Communications Commission and U.S. Department of Justice in a review that could take up to a year. The Senate Antitrust, Competition Policy and Consumer Rights Subcommittee recently announced plans to hold a hearing in late January or early February.
If the deal is approved, Comcast-NBCU would control major information arteries critical to keeping Americans entertained as well as informed about the nation and the world. Wielding unprecedented economic power, Comcast-NBC would operate two broadcast TV networks, 26 TV stations, 10 regional sports networks, and marquee cable networks in addition to being the country's largest cable and residential broadband provider by subscriber.
"Driven by the need to increase cash flow and net income, Comcast-NBCU would have the incentive and ability to use its powerful array of media assets to compel competitors to pay more for programming than they should, especially in the area of retransmission consent for NBC broadcast stations and for other national and regional networks that feature live or same-day sporting events considered ‘must have' content by consumers," Polka said.
Polka added that in reviewing the transaction, FCC and Justice Department officials need to look beyond Comcast-NBCU's vague promises of good behavior and focus instead on the company's undeniable ability and financial incentive to distort competition and easy inclination to migrate to the Internet a flawed cable programming market that routinely results in higher monthly cable bills and the inability of operators to offer consumers the programming packages they want to view.
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