Politico parent Allbritton Communications goes to battle at FCC over Comcast-NBC Universal deal
A small but very influential media company has become a thorn in the side of Comcast Corp. as the cable giant tries to get regulatory approval for its proposed purchase of NBC Universal through lawmakers and regulators.
After sitting on the sidelines for much of the Federal Communication Commission's review of the deal, Allbritton Communications -- whose holdings include WJLA-TV, the Washington, D.C., ABC affiliate; NewsChannel 8, a local cable news network; and Politico, the website and newspaper whose readership includes just about every political player inside the Beltway -- is using its clout to voice concerns about a Comcast-NBC Universal union.
Although it had been mum on the merger until now, Allbritton has gotten an audience with top FCC staffers and even the regulatory agency's chairman, Julius Genachowski, over the last two weeks.
Last week, Allbritton chief Robert Allbritton told Genachowski that the Comcast-NBC deal has "potentially ominous implications" for NewsChannel 8, according to a regulatory filing from the company. Allbritton's big concern is that if Comcast gets NBC, not only will it own the cable systems serving the Washington, D.C., area, but it will also own the NBC station there, WRC-TV. That, Allbritton fears, will give Comcast a lot of power to compete and perhaps harm NewsChannel 8. It wants conditions put on the deal to protect its D.C. holdings.
Allbritton has also been using its holdings to run commercials against the deal. Politico's website and other Allbritton outlets in the D.C. area have carried hard-hitting advertisements critical of Comcast and NBC. One spot calls the deal "the largest merger of media power in American history" and warns, "If Comcast and NBC are allowed to create their media monopoly, then local viewers like you lose." The advertisements have become a regular fixture on Politico writer Mike Allen's "Playbook" page, which is one of the most-read columns by D.C. bigwigs.In an e-mail to Company Town, Allbritton General Counsel Jerald Fritz said its big issue is that Comcast wants to tie a distribution deal for NewsChannel 8 to a deal for WJLA and other TV stations Allbritton owns around the country, rather than negotiate separate deals for its various entities. Fritz, citing rumors that Comcast will try to launch its own D.C. news channel should it succeed in acquiring NBC, said by not having to pay NewsChannel 8 as a standalone service, the cable company has "the incentive and ability to financially cripple NewsChannel 8."
Comcast countered that Allbritton is trying to use the regulatory review of the NBC deal to cut a better deal. In a letter to the FCC, Comcast said it has previously cut deals with Allbritton for NewsChannel 8 that include the company's other TV stations, including WJLA.
"Allbritton improperly seeks to use this proceeding to extract concessions from Comcast while refusing to engage in reasonable negotiations, as the parties have in the past," the cable company said.
Comcast is also miffed that Allbritton has not taken part in the regulatory review of the deal until now. Like Minnesota Vikings quarterback Brett Favre skipping mini-camp and then showing up at the last minute, Allbritton had bypassed the lengthy and thorough review the FCC has been conducting of the deal and is still getting high level meetings at the FCC. Comcast doesn't think Allbritton should be able to skip much of the review process and then get special treatment.
"The Commission should not countenance this attempted misuse of its processes," Comcast lawyer Michael Hammer wrote to the agency.
Allbritton's Fritz responded to Company Town that until its recent talks with Comcast about NewsChannel 8 went south, it was not planning to offer an opinion on the deal one way or the other. "It was only after Comcast insisted that the retransmission consent fees for unrelated broadcast stations be included in the process that we began to see Comcast's potential game plan," Fritz said.
There have been some whispers that another reason why Allbritton wants to negotiate a separate deal for NewsChannel 8 is because it wants to protect a revenue stream from Walt Disney Co. and its ABC network. Allbritton owns a lot of ABC stations and the network has indicated it wants a cut of any money its affiliates get from distributors such as Comcast in return for carrying the station. If NewsChannel 8's fees are lumped in with Allbritton's ABC stations, its revenue could shrink. Fritz said his station group's affiliation deal does not expire for many more years and is not a factor in the company's fight with Comcast.
Even though Allbritton is late to the party and missed most of the deadlines the FCC set to voice objections, there is nothing in the rulebook that says they can't have a voice. However, only parties that potentially want to appeal whatever decision the agency makes have to meet the various deadlines to file comments. In other words, if the FCC approves the Comcast deal, Allbritton will have no standing to gripe about it.
-- Joe Flint