"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

In NBC-Comcast Deal, Quiet Concerns

In Uncategorized on June 22, 2010 at 8:38 am

Brian Roberts, left, of Comcast, and Jeff Zucker, of NBC Universal, at a House hearing in February on the proposed merger.

Oldspeak: “Would they really allow Comcast and NBC to merge? That’s controlling all the distribution. That’s controlling all the programming, there isn’t any way that this could be in the public interest.” We already have the Disney Broadcasting Company (ABC), The Rupert Murdock Broadcasting Network (DirecTV) soon we’ll have the Comcast Broadcasting Company (NBC) Media consolidation continues at an unhealthy and conflicted interest ridden pace.

From Brian Stelter @ The New York Times:

Comcast, the nation’s biggest cable provider, has long played hardball with competitors and content providers. Now that it is seeking control of NBC Universal in a $30 billion transaction, those competitors are piping up, expressing fears that Comcast will use its consolidated power to favor its own content and squeeze out rivals.

But one group has been noticeably silent: local television broadcasters.

The owners of local stations are worried that if Comcast owned NBC, its market power would hurt competing stations and drive down the prices that those cable companies pay to retransmit local programs, potentially reshaping the local TV landscape.

But the broadcasters have largely kept quiet about the concerns before the Monday deadline set by the Federal Communications Commission for public comments about the proposed sale. That is partly because they have been locked in negotiations with Comcast for months, trying to reach agreement on protections for competitors that both sides can live with.

Most stakeholders expect regulators to approve the deal, with conditions attached, by early next year. A wide array of public officials has publicly supported the deal, citing economic benefits and programming opportunities for local communities.

The deal would be the first time that a powerhouse in pay cable would own one of America’s few over-the-air networks.

The combination comes at a particularly precarious time for broadcasters, when no less than the local station model itself is in doubt. Stations’ advertising revenues have fallen in lockstep with the economy, and alternatives like direct-to-cable distribution look more attractive than ever.

Comcast, of course, owns those direct-to-cable pipes, giving the roughly 200 NBC affiliates reason to fear that Comcast could bypass them altogether and take NBC’s best-known shows straight to cable customers. Those affiliates have been wrapped up in talks with Comcast for months, and they are expected to support the sale — with important caveats — on Monday.

“Never before have a network and a cable company — of course, the country’s biggest cable company — been co-owned,” said Brian Lawlor, the chairman of the NBC affiliate board, in explaining why “there was initially apprehension” when the deal was announced in 2009. Comcast has 23.5 million cable subscribers.

Mr. Lawlor, who oversees the E. W. Scripps Company’s 10 TV stations, and other representatives met repeatedly in New York and once in Comcast’s hometown, Philadelphia, with Steve Burke, the Comcast chief operating officer and former ABC Broadcasting president.

In an F.C.C. filing on Monday, the affiliates will indicate support for the merger if a few conditions are attached. Among them: that Comcast will not move sports events likeNational Football League games and the major Olympic events from (free) NBC onto (pay) cable; and that, in the event that negotiations with a local station break down, Comcast will not bypass the station and deliver a same-day feed of NBC via cable.

Mr. Lawlor, whose company also owns ABC-affiliated stations, said he had “looked at this both ways” and, after the meetings with Comcast, is “walking away with a level of confidence in this.”

The terms and the time frame for the conditions were unclear. In a statement on Friday, Comcast said, “We’ve committed since the deal was announced to preserve and strengthen the over-the-air business model in the challenging economic environment facing broadcasters.”

Comcast has said that it intends to retain ownership of the stations that NBC owns, something that the affiliates support because “it’s keeping skin in our game,” Mr. Lawlor said.

Brian Roberts, chairman and chief executive of Comcast, and Jeff Zucker, president and chief of NBC Universal, have assured lawmakers that the merger will benefit consumers.

Other station owners are markedly less confident, although most decline to comment on the record. Jim Goodmon, the president of the Capitol Broadcasting Company, which controls the CBS affiliate WRAL and other stations in North Carolina, said in an interview on Friday that the proposed deal is “just beyond the pale.”

“Would they really allow Comcast and NBC to merge? That’s controlling all the distribution. That’s controlling all the programming,” said Mr. Goodmon, a longtime opponent of media consolidation. “There isn’t any way that this could be in the public interest.”

Echoing those concerns, the affiliates of ABC, CBS and Fox — who compete fiercely in local markets — teamed up in the winter to press regulators to attach conditions to the deal. In a letter to CBS affiliates in March, Tim Busch, an executive vice president at the Nexstar Broadcasting Group, conveyed concern that the merger would give Comcast reason to discriminate against non-NBC affiliates “in terms of Comcast’s cable carriage, retransmission consent negotiations, and advertising and promotion practices.”

Corie Wright, a lawyer for Free Press, a nonprofit group that advocates for media reform and opposes the deal, said the non-NBC affiliates were also worried about the consolidated advertising power that Comcast would have in markets where it would own an NBC station as well as a cable franchise. “Comcast will become one-stop shopping for advertising in those markets,” she said, potentially hurting other broadcasters.

Reached on Friday evening, Mr. Busch, said, “Things are still in discussions” with Comcast. He called the discussions productive and declined to comment further.

It is not just broadcasters that are fretting. The satellite distributor Dish Network, in a letter to lawmakers in February, warned that the deal would give Comcast the incentive to speed up connections to its own services, like the online TV hub Fancast, while slowing down connections to competing services. Comcast has a history of “network management,” rooted in action it took in 2007 to slow down its customers’ access to some file-transferring applications.

A Comcast spokeswoman said, “We treat all Web sites and services the same today, and have no plans to change that.”

Concerns about unfair access persist among players like Bloomberg L.P., which is trying to turn its business channel into a serious competitor to the NBC-owned CNBC. Having expressed concern that Comcast would try to choke it, Bloomberg has demanded that Comcast treat its channel the same way as CNBC.

Conditions are regularly imposed on big media deals like the AOLTime Warner merger and the News Corporation’s purchase of a stake in DirecTV. Ms. Wright said, “This merger goes wider and deeper than any of those.”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: