Some Want Comcast-NBC Universal Blocked by U.S.

Deal curbs proposed to the FCC by the companies (WID Jan 29 p7) don’t address competition and antitrust concerns, said representatives of the American Cable Association, Communications Workers of America, Free Press, Media Access Project and WealthTV. They're part of an “ad hoc group” concerned about the deal (WID Jan 8 p3) and all but the ACA said they oppose it outright. ACA is taking a practical approach because “we believe it is most likely the merger will be approved,” President Matt Polka said.

House Communications Subcommittee staffers held a briefing on the deal Wednesday afternoon, said Hill and industry sources. Based on the meeting, Democratic members are expected to raise concerns about combining content and distribution companies, and what the deal means for affiliates and consumers, while Republicans are likely to show more support for the transaction, said Hill sources. It’s possible members may be late to the morning hearing, because they are attending a National Prayer Breakfast, said one Hill source. The hearing must end by 1:30 p.m., in part because the Commerce Committee has a hearing at 2 p.m. with Health Secretary Kathleen Sebelius, the source said.

FCC staffers are forming a team with people from across bureaus and offices to review the deal, as is typical in evaluating large transactions, officials there said. Comcast-NBC Universal is the first major media transaction before the commission since Sirius agreed to buy XM, a deal cleared by the FCC 3-2 with conditions in August 2008. Likely to be part of the transaction review team are Jennifer Tatel, head of the Media Bureau’s Industry Analysis Division, and Jim Bird, head of the Office of General Counsel’s transaction review team, agency officials said.

Other staffers from that bureau and office and perhaps from the Wireline Bureau and Office of Strategic Planning also may participate in reviewing the deal, FCC officials said. Executives of Comcast and NBC Universal have made few if any eighth floor visits since their public interest filing last Thursday, they said.

They also were slated to file long-form transfer of control applications that day to the FCC for each TV station owned by NBC Universal, an official said. The filings have since been made (http://xrl.us/bguiee), spokeswomen for the Media Bureau and Comcast confirmed. The bureau representative declined to comment on the groups’ opposition to the deal or commission review of the transaction.

Small cable companies are concerned they'll be frozen out of getting certain online content from Comcast-NBC Universal, such as the cable operator’s Xfinity service, Polka said. He pointed to the experience of Wide Open West, which wasn’t able to get that service from Comcast and whose CEO will discuss it at a Hill hearing tomorrow. “The concern regarding online programming is significant,” Polka said. “I don’t even think members of Congress have a grasp of the full potential where there could be such problems or even in the regulatory agencies."

Among issues Comcast CEO Brian Roberts and NBC Universal CEO Jeff Zucker likely will discuss at Thursday morning’s House Communications Subcommittee hearing and an afternoon one before the Senate Antitrust Subcommittee will be Web video, said David Cohen, an executive vice president at the cable operator. There are “very low barriers to entry -- and access to content is plentiful,” he wrote on Comcast’s blog, http://blog.comcast.com. “Our combined share of the market is minuscule (today, that market is dominated by Google/YouTube and populated by dozens and dozens of other sites),” he said. “We play such a small role in this market (either as a content provider or as an Internet video competitor) that it just isn’t credible to conclude that we have any capacity to get in the way of the development of video over the Internet."

Comcast makes “empty promises” and Free Press is “extremely skeptical that any one condition or even a whole host of conditions” will ameliorate harms, said Policy Counsel Corie Wright: “The danger of this merger is the anti-competitive harms or incentives are baked into the structure.” The FCC and Justice Department “need to think long and hard about whether conditions would be sufficient, because we haven’t seen anything” showing they would be. The deal “raises real antitrust concerns” and “especially” for the Internet, said Telecommunications Policy Director Debbie Goldman of the CWA, representing 2,000 Comcast employees and 2,500 NBC Universal broadcast technicians. “Mergers typically lead to job loss” and the companies should pledge to neither cut jobs nor pay, she sasid. Goldman is against tying and bundling of Internet content at Comcast-NBC Universal.

Small rural telephone companies separately voiced “grave concerns” about the deal, in two letters sent Wednesday to the chairmen and ranking members of the House Communications Subcommittee and Senate Antitrust Subcommittee. The Organization for the Promotion and Advancement of Small Telecommunications Companies fears the combination will mean reduced availability of video content for small video and broadband providers, it said. “We are concerned that a combined Comcast/NBC will charge too much for its video content, block or restrict the ability of our members to provide programming to consumers, or prioritize the delivery of its own content to the detriment of consumers."

Thursday’s hearings “should be the first of many hearings on this media merger, which is colossal in its scope and size,” Consumers Union Policy Analyst Joel Kelsey said in a written statement. “There is great potential for significant consumer harm,” including possibly higher cable and Internet rates and less free online content, he said.

Getting rid of carriage deals’ restrictions on alternative distribution methods for over-the-top video “would be an important thing to do” but not necessarily a sufficient remedy, said attorney Kathleen Wallman, representing WealthTV. “It’s an important thing that the Hill and the FCC would have to address.” An administrative law judge recommended the independent channel’s program carriage complaint against the cable operator be dismissed by FCC members, something they've not yet acted on. President Andrew Schwartzman of the Media Access Project believes “conditions are insufficient to address the threat posed by online video and the Xfinity offering that Comcast has. Over-the-top video and the possibility that younger customers will ‘cut the cord’ is a substantial threat to the cable television revenue stream,” he said. “They're trying to lock in that video services revenue steam and I don’t see any way to fix that.”