Consumer and industry groups concerned with the proposed Comcast-NBC Universal merger are calling on Comcast Corp. to back up its new promises of good behavior to Capitol Hill by withdrawing from its court attack against the Federal Communications Commission's critical pro-competition rules for the pay-TV distribution market.
On Dec. 3, 2009, Comcast and NBC Universal announced their $30 billion merger in tandem with an assortment of public interest commitments. One commitment dealt with extending the FCC's program access rules to retransmission consent negotiations for the 26 TV stations, including 10 NBC affiliates, that Comcast is acquiring in the transaction. This commitment would last "for as long as the FCC's current program access rules remain in place," Comcast and NBCU said.
The consumer and industry groups, including the American Cable Association, expressed their concern in a Feb. 19 letter to Comcast Chairman and CEO Brian Roberts. The letter noted that Comcast omitted from its menu of merger promises any acknowledgement that it has asked the U.S. Court of Appeals for the D.C. Circuit to dismantle the most meaningful feature of the program access rules: The ban on exclusive contracts between cable operators and affiliated cable networks delivered via satellite.
With the ban in place, all multichannel video programming distributors (MVPDs), including small cable operators, have the legal right to license satellite-delivered cable networks affiliated with Comcast. Without the ban, Comcast could potentially withhold such marquee cable brands as USA, Syfy, CNBC, MSNBC, Bravo, and Weather Channel from any pay-TV provider.
If Comcast is successful in eliminating the ban, the FCC's key program access rule would no longer exist, and Comcast's merger-specific commitment would vanish before the FCC and the Department of Justice even had time to finish their review of the merger. In a statement given to the media, Comcast gave no indication that it would withdraw from the court case. Before three congressional committees within the past month, Comcast's Roberts has claimed that program access rules were sufficient to protect fair competition.
In the 1992 Cable Act, Congress adopted program access requirements to promote competition among
MVPDs and provide consumers with as much choice as possible. Twice renewed by the FCC, the rules prevent dominant vertically integrated media giants such as Comcast from abruptly pulling content that rivals need to remain successful market participants.
It remains unclear whether Comcast will also challenge the FCC's newly adopted regulations closing the so-called terrestrial loophole in the program access rules. Until recently, the program access rules covered programming delivered only by satellite. But these new rules extend the program access regime to programming transmitted terrestrially -- a change critical to ensuring that Comcast can't lock up regional sports programming. Comcast opposed the adoption of the rules during the FCC rulemaking proceeding.
The signatories to the letter to Comcast's Roberts were: The American Cable Association; Communications Workers of America Consumer Federation of America; Consumers Union; Free Press; Media Access Project; The National Telecommunications Cooperative Association; The Organization for the Promotion and Advancement of Small Telecommunications Companies; Public Knowledge; The Rural Independent Competitive Alliance; The Satellite Broadcasting & Communications Association; and The Sports Fan Coalition.
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