NBC affiliate board chair wants conditions on Comcast - NBC Universal deal
When it comes to the merger of cable giant Comcast Corp. with programming behemoth NBC Universal, the attitude of Michael Fiorile, chairman of NBC's affiliate board of directors, is similar to President Reagan's toward the USSR -- trust but verify.
In testimony submitted to Congress on Comcast's deal to take majority control of General Electric Co.'s NBC Universal, Fiorile said he has been encouraged by what the cable company has said about its support for NBC and broadcast television, but wants strong conditions to protect the interest of the network's affiliates. Fiorile is president of Dispatch Printing Co., owner of NBC affiliate WTHR Indianapolis. As chairman of the NBC affiliate board, Fiorile is the voice of the network's nearly 200 local television affiliates.
Fiorile, who will testify in person Thursday morning at a hearing on the deal held by the House Subcommittee on Communications, Technology and the Internet, said in his prepared testimony that affiliates are concerned that Comcast could "gradually migrate some or all of the most compelling sports, news and entertainment programming and talent away from free, over-the-air distribution on NBC to its newly owned cable channels that are made available only to paying subscribers, such as Bravo and USA Network."
If that were to happen, NBC's local stations would be irreparably harmed. If Comcast were, for example, to try to move NBC's Sunday night football games to its own sports channel Versus, it would be "devastating to affiliates." Though that may seem far-fetched, Fiorile did note in his testimony that in Comcast's recent filing at the Federal Communications Commission seeking approval of the deal, the cable company said the marriage would "allow for NBC's sports programming to be distributed on Versus, Golf Channel" and other Comcast sports networks.
The affiliates are also worried that Comcast will try to use NBC programming to jump-start its own video-on-demand aspirations. The fear would be that Comcast would use VOD to premiere highly anticipated NBC shows, which would reduce the value of content to the network's affiliates.
Also submitting testimony is Colleen Abdoulah, chief executive of WOW, a small distribution service that competes with Comcast in Detroit and Chicago. Abdoulah, who is also speaking on behalf of other small distribution services, expressed concern that the new entity would use its clout to keep popular programs and networks away from rival distribution services.
Comcast chief executive Brian Roberts and NBC Universal chief Jeff Zucker jointly submitted testimony. Much of it reiterated what the two companies have already said about their commitment to preserving NBC, better serving the public and not hurting the competition.
Testifying on behalf of Comcast and NBC Universal was Adam Thierer, president of the Progress & Freedom Foundation, a D.C. think tank. He told the subcommittee to be wary of "paranoid predictions of a media apocalypse." Citing recent mergers including AOL - Time Warner, News Corp. - DirecTV and satellite radio firms XM and Sirius, Thierer said the only harm was not to consumers or content providers but "to the merging firms themselves and their shareholders."
Wall Street will love that.
-- Joe Flint