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ACA Members Call For Strong Comcast-NBCU Conditions

More than 40 American Cable Association members filed a letter with Federal Communications Commission Chairman Julius Genachowski arguing that the Comcast-NBCU merger would, if approved without meaningful conditions, result in their having to pay much higher prices for must-have content, such as regional sports networks and national cable networks.

"Regulators have an obligation to look past Comcast and NBCU's self-serving assurances and must mitigate the obvious public interest harms of their massive media merger by imposing granite-strong conditions that are guaranteed to prevent the predictable above-market spikes in programming costs to consumers of small cable operators," American Cable Association President and CEO Matthew M. Polka said.

In their Nov. 29 letter, the ACA members, headquartered in 18 states, noted that although they do not compete with Comcast for pay-TV subscribers, they would nevertheless have to lease critical programming assets from Comcast-NBCU to remain viable market participants. Comcast-NBCU will own nine regional sports networks, 10 NBC local TV stations and about 20 prestige national cable networks -- all widely considered "must have" programming by pay-TV distributors both large and small.

The ACA members said, "When multiple blocks of this "must-have" programming are combined under single ownership, what little bargaining leverage we have to resist unjustified increases in carriage fees will be reduced materially. This is because Comcast-NBCU can then threaten to withdraw all of these blocks of "must-have" programming simultaneously."

Polka noted that regulators can expect cable rates to rise if Comcast-NBCU is approved without robust and durable conditions. ACA, for example, has called for special program pricing protections for pay-TV operators with 125,000 subscribers or fewer as an alternative to lengthy and costly arbitration proceedings with Comcast-NBCU.

"For ACA members, the default position in any dispute with Comcast-NBCU will be to pay more for all Comcast-NBCU programming, because failing to do so would mean the sudden and simultaneous withdrawal of multiple blocks of ‘must have' content that they need to remain viable as pay-TV distributors in hometown America," Polka said.

The FCC and Justice Department are reportedly nearing the conclusion of their review of the Comcast-NBCU deal.

"Smaller providers and their customers who are threatened by this transaction cannot afford to settle any longer with conditions that may look good on paper but fail to work in practice, as was the case twice before with remedies the FCC imposed under both the News Corp.-DirecTV and Adelphia-Time Warner-Comcast transactions. Simply put, we need to get it right this time," Polka said.

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