Negative Comments on Comcast/TWC Seen Leading to Conditions
Those wanting the FCC to deny Comcast’s planned buy of Time Warner Cable are likely to be disappointed when the agency likely approves it with conditions, cable operator and programmer officials told us Wednesday. Though several powerful commenters, including Dish Network, asked the FCC to deny the transaction, many others suggested possible conditions, said an industry official. Many other influential entities, such as large content companies and NAB, didn’t weigh in for or against the deal. “It’s very dangerous to come out against this deal because of the amount of influence Comcast will have if it’s approved,” said Georgetown Law Institute for Public Representation Senior Counselor Andrew Schwartzman, who filed comments opposing Comcast/TWC.
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Though opponents of the deal raised many arguments about the market power and leverage Comcast/TWC would wield (CD Aug 27 p2), those arguments are unlikely to trump that the firms don’t directly compete for the same subscribers, said industry officials. The FCC “should reject the Applicants’ invitation to rule that each company is dominant already in geographically separate fiefdoms, and that therefore the merger cannot do much more harm,” said Dish. The lack of direct competition would put regulators on shaky ground for denying the deal, said cable industry officials. “History suggests that in the end, the commission tends to approve these things,” Schwartzman said. Concerns about the power Comcast could wield over online video, programming and other areas are likely to be addressed in conditions, said industry officials.
Numerous entities from NBC affiliates, to CenturyLink, to spot advertising firm Viamedia suggested a variety of conditions to limit Comcast’s power after the deal, and those conditions could stack up to become so onerous that the deal could dissolve without being outright denied, said Schwartzman and industry officials. Suggested conditions to limit Comcast’s negotiating ability with programmers and broadcasters or requiring it to disclose data to competitors could combine to make the deal no longer worthwhile, some said. Others disagreed. It would require some extremely restrictive conditions for a deal worth about $66 billion such as Comcast/TWC not to happen, said a cable attorney not connected to the transaction. The transaction is hard to stop, said a cable executive.
Comcast expects the deal to be completed in 2015, a pushback from its earlier estimate of the end of 2014, it said in an SEC filing Tuesday (http://bit.ly/1sDo3RR). Schwartzman and some industry officials suggested that the delay could be a reaction to opposition to the transaction. But a Comcast spokeswoman told us in an email that the delay is a function of the FCC timeline for considering the deal. “It has nothing to do with that,” she said of opposition to the deal.
Another sign that industry participants believe the deal is likely to be approved is the absence of comments in the proceeding from large content companies, said cable operator and programmer officials. Though analysts have said the deal is likely to give Comcast/TWC more leverage in negotiating with programmers, most of the opposing comments from that side of the industry came from independent networks like RFD-TV. That’s because large programmers all do business with Comcast, and believe the transaction will be approved, a programming executive told us. If content companies believed it in their business interests to oppose the transaction, they would have filed comments against it, the executive said. “Programmers can’t afford to come out of the closet against this,” Schwartzman said. Another reason could be that large programmers don’t see the deal as a threat the way the smaller programmers do, said a cable attorney. It’s unlikely Comcast would stop carrying the programming of a major network over price negotiations, the attorney said.
The Media Bureau asked Charter Communications to provide a detailed description of its plans to migrate subscribers it would acquire under Comcast’s proposed divestiture deal, including a projected timeline for the transition that will describe any harms that would occur if the transition doesn’t meet specific deadlines. Charter must describe any plans it has for providing the divested subscribers with devices accessible on its network and whether there will be a charge for those devices, what features and services will be available on those devices, as well any service plans, bundled services or pricing it will offer the subscribers, the bureau said Tuesday in a letter to the operator. The letter was released the next day. Charter must describe any plans it has to allow divested subscribers to retain their current service plans and for how long, as well as services or features the divested subscribers previously had access to that Charter won’t provide, the bureau said. The FCC is requiring Charter to give it all documents discussing the migration and transition of divested customers (http://bit.ly/1pIhSgM). The bureau’s new questions follow up on information it sought last week from Charter, Comcast and TWC on their cable systems, subscribers, dealings with other companies and other details (CD Aug 25 p3). Charter must submit answers to the bureau’s new questions by Sept. 11, the FCC said.