Small Cable Operators Fear Media Giant Will Use Clout To Raise Prices, Limit Consumer Choice
PITTSBURGH, January 7, 2010 – The American Cable Association, joining a broad group of industry, laborand public interest organizations, called for major conditions on theComcast-NBC Universal transaction to ensure that the media giant can’t inflictanticompetitive harms on small cable operators or injure consumers by imposingbusiness models that both drive up prices and require the purchase of unwantedcontent available on cable and the Internet.
ACA and 24 othersignatories expressed their concerns about the Comcast-NBCU transaction in aletter (attached) sent today to President Barack Obama and members of Congress.
In addition to ACA,the group includes: the Satellite Broadcasting & Communications Association(representing DIRECTV and DISH Network), the National TelecommunicationsCooperative Association and the Organization for the Promotion and Advancementof Small Telecommunications Companies (representing small telephone companies),Free Press, Consumers Union, and Common Cause (representing consumer interests)and others. The group reflects a cross section of interests committed topromoting the public interest and consumer welfare through thoughtfulgovernment oversight of market-dominant media companies.
In the letter, ACAand the others said: “The merged giant would have strong incentives todiscriminate against other multichannel video providers in granting access toits wealth of programming, including all of its broadcast stations and”must-have” national and regional networks that air live or same-day sportingevents, as well as the market power to enforce anticompetitive ‘bundling.'”
ACA expects to playan active role in the federal government’s review of the Comcast-NBCUtransaction, the most significant media deal to come under close governmentscrutiny in at least a decade.
“By takingcontrol of NBCU, Comcast would become the country’s most powerful online andtraditional programming company with every incentive to raise prices, restrictchoice and force operators to sell consumers content that they don’t want inorder to continue viewing programs they sincerely desire. In their ads, Comcastand NBCU ask people to ‘Dream Big’ but small cable operators know this dealwill be a nightmare for millions of their customers without appropriateconditions,” ACA President and CEO Matthew M. Polka said.
Comcast and NBCUannounced their joint venture in early December, hoping to create the firstmajor combination of a large cable provider and a national broadcast network inU.S. history. The $30 billion deal requires approval of the FederalCommunications Commission and U.S. Department of Justice in a review that couldtake up to a year. The Senate Antitrust, Competition Policy and Consumer RightsSubcommittee recently announced plans to hold a hearing in late January orearly February.
If the deal isapproved, Comcast-NBCU would control major information arteries critical tokeeping Americans entertained as well as informed about the nation and theworld. Wielding unprecedented economic power, Comcast-NBC would operate twobroadcast TV networks, 26 TV stations, 10 regional sports networks, and marqueecable networks in addition to being the country’s largest cable and residentialbroadband provider by subscriber.
“Driven by theneed to increase cash flow and net income, Comcast-NBCU would have theincentive and ability to use its powerful array of media assets to compelcompetitors to pay more for programming than they should, especially in thearea of retransmission consent for NBC broadcast stations and for othernational and regional networks that feature live or same-day sporting eventsconsidered ‘must have’ content by consumers,” Polka said.
Polka added that inreviewing the transaction, FCC and Justice Department officials need to lookbeyond Comcast-NBCU’s vague promises of good behavior and focus instead on thecompany’s undeniable ability and financial incentive to distort competition andeasy inclination to migrate to the Internet a flawed cable programming marketthat routinely results in higher monthly cable bills and the inability ofoperators to offer consumers the programming packages they want to view.
About the AmericanCable Association
Based in Pittsburgh, the American Cable Association is atrade organization representing more than 900 smaller and medium-sized,independent cable companies who provide broadband services for more than 7million cable subscribers primarily located in rural and smaller suburbanmarkets across America. Through active participation in the regulatoryand legislative process in Washington, D.C., ACA’s members work together toadvance the interests of their customers and ensure the future competitivenessand viability of their business. For more information, visit https://acaconnects.org/