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News Corp. worries some proposed FCC conditions on Comcast-NBC Universal go too far

January 14, 2011 |  8:15 am

News Corp., the media giant that is home to Fox Broadcasting, 20th Century Fox and cable channels Fox News and FX, has joined fellow big media conglomerates Time Warner Inc. and Walt Disney Co. in expressing concern with proposed conditions the Federal Communications Commission wants to put on Comcast's pending deal to acquire control of NBC Universal.

In a filing with the FCC, News Corp. detailed a meeting its Washington office had with staff members of the regulatory agency's two Republican commissioners.

At issue are safeguards the FCC wants to put on Comcast and NBC Universal with regard to online video platforms. Specifically, the agency has proposed a condition that would require Comcast to provide its programming to an online video service if rivals such as Walt Disney Co.'s ABC or News Corp.'s Fox were also feeding content to it.

While the idea of this condition is to ensure that Comcast does not withold its content from competing distributors, it has Disney, News Corp. and Time Warner nervous that the FCC is overstepping in its efforts to protect consumers and competitors and that they would suffer as a result.

Unlike Disney and Time Warner, both of which filed letters about their talks with the FCC that were so vague it was difficult to discern whether they were worried about the merger of Comcast-NBC Universal or about the FCC's conditions, News Corp. was very detailed about its fears.

"We expressed our concerns with respect to the potential anti-competitive implications of program access-related merger conditions dealing with online video providers," News Corp. said, adding that it was particularly worried that by forcing Comcast/NBC to enter into a deal with an over-the-top (OTP) Internet provider "it could open the door to a single unfavorable business deal 'establishing the market.'"

Furthermore, News Corp. said, "if a single OTP distribution arrangement could force NBCU to accept the same terms and conditions, those deals could result in undue market pressure that compels other content providers to reach similar deals – regardless of whether they might not otherwise be interested in doing so."

Both Disney and News Corp. have focused their lobbying efforts on the Republican commissioners, betting that they will be more open to arguements that the conditions, as proposed, go too far. Time Warner CEO Jeff Bewkes discussed the matter with FCC Chairman Julius Genachowski, a Democrat. The FCC is expected to wrap up its review of the deal within the next week or so. The Justice Dept. is also conducting its own review of the merger.

-- Joe Flint

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