Proposed Web-Video Curb on NBC After Comcast Takeover May Get Fresh FCC Attention
Requests to ban blocking of online video by NBC after control of its parent company goes to Comcast may gain traction at the FCC after a different broadcast network prevented its Web video from being seen by some cable broadband subscribers, antitrust lawyers and industry analysts predicted. The blocking of Fox.com and Hulu.com video from News Corp. over the weekend, in the company’s retransmission-consent dispute with Cablevision, has raised speculation about similar action by NBC against a pay-TV provider during a retransmission contract dispute when it’s controlled by Comcast (CD Oct 21 p5). The American Cable Association, DirecTV and Dish Network -- foes of the Comcast-NBC Universal deal as it’s planned -- cited the Fox Web video blackout to the approximately 2.6 million broadband subscribers with Cablevision Internet Protocol addresses to renew their request for curbs on Comcast.
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FCC staffers entering the latter stages of reviewing Comcast-NBC Universal likely will pay more heed to calls for such conditions, though the blocking wasn’t related to Comcast, predicted some analysts and lawyers specializing in antitrust communications law. The Fox Web video blackout may be perceived by commission staffers as a new industry development, occurring after the agency’s comment period on the deal closed and allowing them to consider new or modified requests for such curbs, they said. A Media Bureau spokeswoman declined to comment.
"You could certainly view it as a highly relevant development in that you wouldn’t want to blind yourself to it,” said lawyer Chris Kelly of Mayer Brown. “That it’s a new development doesn’t necessarily say anything about which way it cuts” in terms of how the FCC might account for it in an order approving Comcast-NBC Universal, he added. The event may be a “logical outgrowth of the issues that already were teed up in the merger proceeding at the commission, said lawyer Michael Hazzard of Arent Fox. “The distribution issue is already on the table, and this kind of supports the issue raised by a number of” pay-TV companies that compete with Comcast, he said. “This kind of breathes life into what they're seeking."
That News Corp. quickly restored Cablevision broadband subscriber access to Fox Web video indicates the broadcast network quickly saw the flaws in such a strategy, which didn’t increase pressure on the cable operator enough to get a new retransmission deal, and shows that other broadcasters may not follow suit, Kelly said: “Maybe it’s not such a red hot strategy” and News Corp. could be viewed “as a test case.” The issue with Fox is “important,” said analyst Paul Gallant of Washington Research Group. “It’s also pretty complex and it comes so late in the game that the FCC may just decide to look at it on an industry-wide basis rather than in the Comcast-NBC review."
"The dispute between Fox and Cablevision does not in any way affect the Comcast-NBCU transaction,” a Comcast spokeswoman said. “If anything, it reaffirms that any issues around retransmission consent and related matters are industry-wide, not transaction-specific, issues.” Hazzard said it’s possible that the FCC could seek further comment on questions raised by the Fox Web video cutoff as they pertain to Comcast-NBC Universal.
The “donnybrook” between Cablevision and Fox “could spill over” to Comcast-NBC Universal to increase the likelihood that the U.S. imposes over-the-top (OTT) program-access and retransmission conditions on the deal, Stifel Nicolaus analysts wrote to investors Thursday. “Fox’s temporary blocking of Cablevision subscribers from Fox online content will add to calls for DOJ and FCC to extend program access rules to over-the-top Internet video distribution, and to require Comcast to unbundle for retail customers its OTT programming from its cable subscription service.” Both curbs could be imposed on the deal, the analysts said.