Washington speaks out on Comcast-NBC deal
The marriage of the nation's largest cable and broadband provider with a Hollywood entertainment powerhouse has sent shock waves through Washington, D.C., as lawmakers and consumer activists are calling for an intense regulatory review of the deal.
Cable behemoth Comcast Corp., which this morning unveiled a deal to take majority control of General Electric Co.'s NBC Universal, is already gearing up for a long song and dance in Washington to get the acquisition approved. The company sent a letter to key policy makers this morning, saying its deal is "pro-competitive, pro-consumer, and strongly in the public interest."Sen. Herb Kohl (D-Wis.), who chairs the powerful Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, promised that a hearing on the deal would be held.
“This acquisition will create waves throughout the media and entertainment marketplace and we don’t know where the ripples will end," Kohl said in a statement. He added that a hearing was necessary so "consumers can get a better sense of how this deal could affect their access to diverse programming and information, especially as they more often look to the Internet for such services."
Other lawmakers voicing concern about the deal include Sen. John F. Kerry (D-Mass.), chairman of the Senate Commerce Subcommittee on Communications, Technology, and the Internet. Kerry said his subcommittee would "monitor the process closely to ensure that any legitimate anti-competitive and public interest concerns are fully addressed."
The Federal Communications Commission, which will be the lead regulatory agency reviewing the deal, said it would "carefully examine the proposed merger and will be thorough, fair, and fact-based in its review.” Also likely to seriously kick the tires on the Comcast-NBC bus will be either the Federal Trade Commission or the Justice Department.
Comcast Chief Executive Brian Roberts said during a conference call this morning that he expected that there would be conditions on the deal but that it should get through Washington relatively unscathed.
Consumer advocate groups beg to differ.
"The combination of the country's largest cable company, a TV network and a movie studio could present grave dangers to a free and open Internet," warned Gigi Sohn, president and co-founder of the advocacy group Public Knowledge. Added Andrew Schwartzman, president and CEO of Media Access Project: "Consolidation of this kind would give Comcast further incentive to strangle such new forms of competition before they can gain a toehold in the market."
Looking to throw water on potential fires, Comcast said it was making several commitments to ease concerns among lawmakers and activists about the deal. The company said it would not turn NBC's broadcast network into a cable channel. "The combined company remains committed to continuing to provide free over-the-air television through its owned-and-operated stations and through local broadcast affiliates."
Comcast also said it would not withhold its various cable networks -- USA, Bravo, CNBC, MSNBC and others -- from rival distribution services such as satellite broadcaster DirecTV and Verizon's Fios television service. Of course, there are already FCC rules in place prohibiting a cable operator that also owns programming to withhold offering its channels to competitors at fair and reasonable rates.
Furthermore, Comcast said it would not try to influence coverage on NBC's various news outlets. When GE bought NBC in 1986, it made a similar pledge. Comcast also promised to boost local news and public affairs programming on NBC's stations and increase children's programming.
Not everyone thought Comcast's commitments were very meaningful. Jeff Chester, head of the Center for Digital Democracy, called them "pathetic" and added that "today Comcast demonstrated it's only fit to perhaps be allowed to operate Comedy Central."
Most concerning to Chester is that Comcast did not address the issues of network neutrality, which has to do with preventing internet service providers from either restricting access to certain websites or offering access to sites at different speeds. The FCC has a rule-making process underway on the issue.
-- Joe Flint