Comcast-NBCU Merger Critics Talk Up Horizontal Harms
Critics of Comcast’s plan to buy control of NBC Universal played up to regulators the horizontal aspects of the deal ahead of the Monday evening deadline for oppositions to be filed with the FCC. The combination of Comcast’s regional sports networks and the NBC TV stations NBCU owns will lead to higher prices for programming in the five markets where they overlap, the American Cable Association said Monday. It worries Comcast would control too much “must-have” programming in such markets, ACA said. Meanwhile, supporters of the deal filed comments praising Comcast.
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Public interest groups and some independent programmers also pointed to the horizontal aspects of the deal in a letter sent to FCC Chairman Julius Genachowski and Assistant Attorney General Christine Varney. “This new programming behemoth will have unparalleled market power to demand higher prices from cable and satellite operators whose added costs will be passed along to consumers,” said the letter from Bloomberg, Free Press, Public Knowledge, Media Access Project and others.
Chicago, Philadelphia, San Francisco, Washington, Miami and Hartford-New Haven, Conn. are the markets where Comcast’s RSNs and NBCU’s NBC stations overlap, ACA said. Historically, owners of multiple “must-have” programming outlets are able to charge up to 20 percent more to distributors, ACA said. “In the announcement of the merger, Comcast and NBCU said ’this is a merger about content,’ but in its suggested conditions all they focused on was vertical competition and nothing about the content,” said Ross Lieberman, vice president of government affairs for ACA. “We think the FCC can address horizontal concerns and we're certainly asking them to look at that,” he said. “Certainly the DOJ is active."
But the Free State Foundation said the merger is almost entirely a vertical combination, so it’s subject to less strict parameters for review. It did indicate local concentration of programming could pose a problem. “There are some horizontal aspects to the merger, which could be met by a partial divestiture in some local markets if the concentration levels are thought to be too high,” University of Chicago Professor Richard Epstein of Free State wrote in a essay the foundation commissioned in March and cited in its filing this week.
Meanwhile, supporters of the deal filed extensive comments praising Comcast. Elected officials including the governors of California, New York and Pennsylvania, several mayors from markets where Comcast operates, organizations of state and local lawmakers, nonprofits such as the National Action Network and some independent programmers have weighed in supporting the deal.
"Local broadcasters including public TV stations and importantly the NBC local affiliates organization have also expressed their support for the transaction,” Comcast Executive Vice President David Cohen said on the company’s blog. Support from the NBC affiliates came after Comcast agreed to keep marquee sports programming on the broadcast platform, according to news reports.