Friday, February 5, 2010

Congress Grills Comcast, NBCU Executives On Proposed Merger

The Wall Street Journal

WASHINGTON—Lawmakers on Thursday questioned the impact on consumers from Comcast Corp.'s proposed deal to acquire control of NBC Universal, although they didn't suggest regulators should reject the deal.

Lawmakers asked how the transaction would affect consumers' cable prices and the emerging market of online television and cable programming distribution.

Comcast's Brian Roberts, left, and NBC's Jeff Zucker. testify Thursday.

"The issue really boils down to the seven 'C's. Will this combination of communications colossi curtail competition and cost consumers?" asked Rep. Edward Markey (D., Mass.) during the hearing of the House Energy and Commerce Subcommittee on Communications, Technology and the Internet.

Comcast says that its deal, which marries content and distribution companies, doesn't raise antitrust or other competitive concerns. It believes there are multiple competitors in each of its markets and the barrier to entry online is relatively low.

The combination would result in "a more creative and innovative company that will meet consumer demands," said Comcast Chief Executive Brian Roberts.

"Before this joint venture was proposed I was concerned about the future of broadcasting. It's been under a certain amount of duress," said NBC President Jeff Zucker. Comcast's commitment to invest more in NBC's broadcast properties "give me greater comfort in thinking about the future of broadcasting," he added.

Mr. Roberts said he doesn't believe the FCC needs to attach conditions to the deal. He cited voluntary commitments the company had already made to regulators, including keeping NBC as a broadcast network and increasing the availability of children's programming.

Consumer groups, on the other hand, have urged regulators to reject the deal, saying that it will give Comcast too much influence and power over the cable television market and the emerging market of online video.

"The merger has so many anti-competitive and anti-consumer effects that they just can't be fixed," said Mark Cooper, director of research at the Consumer Federation of America, in written testimony. The deal would have "a bevy of anti-competitive effects that will result in higher prices and fewer choices for consumers," he said.

Despite objections raised by consumer groups, none of the House lawmakers on Thursday morning said regulators should reject it.

However, lawmakers did raise several possible conditions that might appease the concerns of Comcast's rivals and competitors.

Colleen Abdoulah, chief executive of WOW, a small cable provider in the Midwest, said that regulators need to require Comcast-NBC to offer its sports and entertainment programming to smaller rivals, including online video content.

House Commerce Committee Chairman Henry Waxman (D., Calif.) raised concerns about whether Comcast could favor the cable channels that it owns, such as the Golf Channel, and NBC's cable channels, over its competitors, and suggested the FCC look into possible conditions.

NBC's affiliate stations want assurances that Comcast won't move valuable NBC entertainment and sports programming away to its cable channels. They also want limitations on Comcast's ability to bypass local stations by putting NBC programming on the Internet and protections for the revenue they get from retransmission deals.

"We need assurances that Comcast will continue to invest in new and compelling entertainment and sports programming," said Michael Fiorile, chairman of the NBC Television Affiliates Board and president of Dispatch Printing Co., which owns the NBC affiliate in Indianapolis.

FCC and Justice Department officials have only recently begun their reviews, which could stretch into the fall or winter.

Rep. Rick Boucher (D., Va.), chairman of the House Internet Subcommittee, said he believes government regulators should "move expeditiously" to compete their reviews. "I'm not saying that the agencies should not impose conditions, but the companies deserve an answer in a timely manner."

Write to Amy Schatz at

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Franken takes skeptic's view of Comcast-NBCU's claims:

Sen. Al Franken, D-Minn., who regularly performed on NBC's "Saturday Night Live" and briefly had a sitcom on the network, is casting a skeptical eye on Comcast and NBC Universal's promises that their alliance will have no impact on rivals or viewers. "You'll have to excuse me if I don't trust these promises, and that is from experience in this business," Franken said.

Franken suggested the companies public interest promises could not be trusted and that Comcast, for one, was arguing that FCC rules would protect consumers on one hand, while fighting the same rules in court. Franken came just short of saying Roberts had mislead him in a meeting they had in his office about the issue. Roberts said it had been a misunderstanding between challenges of program access and program carriage rules.

Waxman: Free programming could be in jeopardy with deal:

Free broadcast TV programming could be threatened by the merger of Comcast and NBC Universal, according to Rep. Henry Waxman, D-Calif., chairman of the House Energy and Commerce Committee. "Many are concerned that this transaction could result in the best of NBC's programming being transitioned to a pay-TV service," Waxman said.

Letter: Comcast-NBCU tie-up would harm democracy:

Rep. Maurice Hinchey, D-N.Y., in a letter written on behalf of himself and five colleagues, is calling on the FCC and the Department of Justice to stop the Comcast-NBC Universal merger. "This merger would further limit the American people's access to a wide array of information and broadcast content that is inherently necessity for a properly functioning democracy," Hinchey said in a statement.

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