Expiration of Comcast/NBCU Conditions Raising Fears of Anticompetitive Giant

The worries raised by DOJ and the FCC when they put conditions on the deal still exist, said lobbyist and lawyer David Goodfriend. He said clients such as Dish Network and independent programmers have grave concerns about an unbridled Comcast. BeIN Sports has a carriage discrimination complaint against Comcast before the FCC (see 1803160069). Goodfriend said beIN's experience with Comcast shows indie programmers "are being disadvantaged."

If Comcast ends up in a deal to buy Fox's nonbroadcast assets, "me and a lot of other people are going straight to the DOJ" to oppose it, Goodfriend said. "Comcast is going to have a lot of 'splainin' to do."

PK last year asked DOJ to investigate Comcast compliance with the consent decree conditions and that the conditions remain in force in the meantime, and Sen. Richard Blumenthal, D-Conn., asked the Antitrust Division to investigate possible anticompetitive threats from Comcast/NBCU (see 1712210018). At Wednesday's event, Blumenthal said he has "growing doubt about the effectiveness of the current antitrust law regime, especially when applied to rapidly changing markets." He said there must be "different modes of enforcement" and more vigilance over oversight of antitrust merger agreements. "We are at a kind of a moment of reckoning for our antitrust laws,” Blumenthal said.

Blumenthal doesn't foresee Congress doing any major review of antitrust laws. "It would be a tremendously complex, intellectually challenging, politically formidable role," he said. "Even with much simpler tasks, the Congress is struggling." He quipped: "Maybe we’ll use the August now-canceled recess.”

Options before Justice include it going to court and seeking to extend some or all of the consent decree, potentially contested by Comcast, said Caroline Holland, Mozilla Foundation tech policy fellow and former Antitrust Division chief counsel-competition policy and intergovernmental relations. The department could seek court-ordered structural separation of Comcast/NBCU via Section 7 of the Clayton Act or let the consent decree expire, see what the cable operator does and bring an antitrust case, she said. She didn’t comment on the likelihood of those approaches, or of it doing nothing, but noted DOJ antitrust chief Makan Delrahim’s antipathy to behavioral conditions.

Program carriage and program access rules already were in place when Comcast bought NBCU, showing that conditions on the transaction were aimed at filling a gap in protections, said economist Hal Singer, who said he has worked for programming and OVD clients in Comcast disputes. When the DOJ conditions expire, "we still have a gap," he said, arguing the focus should be on updating programming rules "for the internet age" and extending them to the entire MVPD and ISP industries.

The conditions that made Comcast a competitive threat are worse today, Lieberman said. In 2011, there were six markets where Comcast was a cable provider and owned local broadcast stations and regional sports networks; today, there are seven, he said. And Goodfriend said Comcast's behavior in 2011 was theoretically held in check by the net neutrality rules of the 2010 Open Internet Order, but today no such rules are preventing it from, for example, blocking a rival programmer's direct-to-consumer over-the-top offering.

Extending the program carriage rules into the broadband space “starts to look a lot like net neutrality rules," Singer said. He criticized Delrahim's critiques of behavioral conditions, claiming the assertion that monitoring compliance drains agency resources "is completely wrong." Singer also said complaints against Comcast since the merger show that criticism that behavioral conditions don't deliver relief "is factually wrong." He said a "gaping hole" in the coverage is the appeals process, and a solution would be relief granted immediately on a finding, even while Comcast appeals that finding.

Comcast said there's "no credible basis to pursue an extension or modification of the consent decree or conditions." It said it "met or exceeded" all conditions and obligations for more than seven years and that none of its seven annual compliance reports filed with the FCC was challenged or objected to. Nor has DOJ ever pursued any enforcement action, it said. "All of the market segments in which we do business are more robust and more competitive now than they were before our NBCUniversal transaction, including the explosive growth of online video distributors, which Comcast-NBCUniversal has significantly fostered through hundreds of OVD content licenses, substantial broadband investment and expansion, and inclusion of OVDs like Netflix, You Tube, and Sling TV on our innovative X1 platform," it said. "We have reached dozens of content deals with MVPDs without loss of programming to consumers. In fact, the arbitration mechanism created in the FCC order has been used by only one MVPD over seven years. There is simply no precedent and no need for the conditions to be extended or modified, or our transaction revisited.”