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ACA Praises Lawmakers Seeking Comcast-NBCU Conditions

The American Cable Association praised key Capitol Hill lawmakers for recommending conditions that would protect consumers and competition from market power abuses stemming from the proposed $30 billion Comcast-NBC Universal merger announced more than a year ago and still awaiting regulatory approval from the Federal Communications Commission and the Department of Justice.

"The market power flowing from the Comcast-NBCU merger will cost pay-TV subscribers at least $2.4 billion more over nine years without narrowly tailored conditions to curb abuses," ACA President and CEO Matthew M. Polka said. "We firmly believe that the Comcast-NBCU transaction will raise costs for consumers and we urge regulators to adopt remedies that work for smaller operators."

In the past two weeks, FCC and DOJ officials received letters from leading Senate and House communications policy leaders expressing concern that the Comcast-NBCU merger will create a dominant content and distribution provider with the incentive and ability to undermine competition, justifying the imposition of conditions that would address those harms.

House Energy & Commerce Chairman Henry Waxman (D-Calif.) sent a letter Dec. 7 to FCC Chairman Genachowski in which he specifically mentioned the potential for anti-competitive actions against small cable operators.

"We could not agree more when Chairman Waxman said in his letter that the FCC should develop merger conditions that do not force smaller companies into accepting 'unreasonable fees, terms, or conditions simply because they do not have market power,'" Polka said.

On Dec. 10, Sen. Jay Rockefeller (D-W-Va.), chairman of the Senate Commerce Committee, sent Genachowski a letter noting that the Comcast-NBCU merger is a serious threat to consumers and competition in traditional and online video distribution markets that could lead to higher pay-TV subscription rates, justifying consideration of regulatory conditions that would prevent this unprecedented transaction from harming the public interest.

"Sen. Rockefeller deserves praise for making clear in his letter that the stakes for the country are very high and close regulatory scrutiny of the Comcast-NBCU transaction is not only warranted but essential to preserving the competitive framework resting on government initiatives begun nearly 20 years ago," Polka said.

In the letter, Rockefeller added that "it would be unacceptable for a transaction like this to lead to further consumer cable rate increases."

ACA has pointed out many times that effective conditions are necessary because Comcast-NBCU's grip on major cable and broadcast programming assets will give the media giant the incentive and ability to set the price of the content at unjustifiably high above-market rates for pay TV providers.

"Particularly smaller ones," Polka noted, "resulting in less competition and higher consumers bills."

Sen. John Kerry (D-Mass.), chairman of the Senate Subcommittee on Communications, Technology, and the Internet, sent a Dec. 16 letter to Genachowski and Christine Varney, Assistant Attorney General for the Antitrust Division, stressing the need for the Comcast-NBCU merger to
work for all consumers.

"ACA agrees with Sen. Kerry that the Comcast-NBCU merger 'will create a unique company, with unique power in the market,' justifying a close regulatory review that prevents Comcast-NBCU from extracting above-market fees for its key programming assets -- such as NBC TV stations, Comcast regional sports networks and highly rated Comcast and NBCU national cable networks - from distributors," Polka said.

Other lawmakers also weighed in on the Comcast-NBCU merger, including Rep. Edward Markey (D-Mass.), who voiced concern about the competitive impact of such a large and transformative transaction on traditional and online markets.

"ACA is pleased that so many key Capitol Hill lawmakers with many years of experience in this policy area share our concerns about the Comcast-NBCU deal," Polka said.

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