The marriage of Comcast and NBC is bad news for consumers. But Washington and Wall Street have already bought into the idea that it's a done deal. That's why Americans need to speak out now and stop the mega-merger!
Just days after the Federal Communications Commission sided with the biggest phone and cable companies and put in place a controversial and fundamentally flawed Net Neutrality rule, it is on the verge of giving another big handout to Big Media.
According to press reports, the FCC chairman Julius Genachowski is poised to approve the pending Comcast-NBC merger with conditions. Waiting until Congress was out the door and most people were starting their holidays, the FCC Chairman today circulated his plan to give Comcast the green light for their takeover of NBC. The move seems to play right into Comcast’s hands, as it has pushed the FCC to wrap up their review before the end of the year.
“We are deeply disappointed that the FCC is apparently moving to approve this merger,” said Free Press Policy Counsel Corie Wright. “Comcast’s takeover of NBC would have a harmful impact on competition and consumers, particularly in the emerging online video market. The conditions reportedly proposed by the FCC chairman recognize this danger, but we have serious concerns that they will not go far enough to protect the public from this unprecedented media behemoth.”
The next step is for all five FCC commissioners to vote on the chairman’s merger proposal.
Unfortunately for Comcast, press reports suggest that a number of the FCC commissioners have already left Washington and won’t be back until the new year. Even Jeff Zucker, the head of NBC, had to admit that no deal would get done before 2011.
If this merger is approved it will profoundly transform our media system. Comcast-NBC will control one in five television viewing hours, and it will have a stake in 125 cable channels, film studios, websites and other properties. Consumers are the ones who will be paying the price through higher bills and fewer choices, and they deserve a full and thorough review of the impact of this merger. We don’t need another massive giveaway to big media that leaves consumers high and dry.
In the brief window of time between now and when the FCC commissioners vote in January, we need a groundswell of voices from around the country to stand up against this merger. Comcast may be rushing to get this deal done as quickly as possible, but the FCC’s mandate is to serve the public, not bow to the industry it is supposed to be regulating. With the chairman making it clear that he is ready to rubber stamp this merger, the decision will come down to FCC commissioner’s Copps and Clyburn. Over the past year, the two have emerged as vital champions for the public interest. As the vote on this merger approaches, we need to let them know that the public is with them.
Let’s ring in the new year by saying no to Comcast/NBC.
If approved, the Comcast/NBC-Universal deal will be the largest media merger in a generation. Comcast is the nation’s dominant residential cable and Internet company, and NBC programs reach every TV-watching home in America. But what does this all add up to for the public? We did the math.
One of the world’s largest media giants came out with a long list of concerns about the proposed Comcast/NBC-Universal merger. The LA Timesreported this week that Viacom recently visited the Federal Communications Commission to outline its concerns about Comcast’s take over of NBC.
The LA Times reports:
Among the topics Viacom discussed were concerns it had that Comcast would have “increased incentive and ability to impede competition … by favoring its own content to the detriment of independent programmers. Viacom, the filing said, asked the FCC to “carefully evaluate” the effect that the deal would have on independent programmers “and consider taking steps to safeguard competition and protect unaffiliated providers of video programming from anti-competitive practices.”
At first glance, I was tempted to roll my eyes. After all, it wasn’t that long ago that Viacom merged with CBS, and then unmerged (sort of). But the more research I did, the more I came to see this as a serious and important critique of the Comcast merger.
Why is this significant?
First, fears that this merger will hurt independent programming are not new. In voicing its concerns, Viacom joins the ranks of a number of independent programmers worried that a combined Comcast/NBC could use its immense market power to favor its own content over that of unaffiliated companies. That means that Comcast can favor NBC shows over other programs. This would be particularly harmful to local and independent programming and would make it even harder to find alternative voices on the cable dial.
What is significant is that a company as big as Viacom is worried. That suggests that the new Comcast/NBCU will be so huge that other large companies worry that not even they can curb the new goliath’s potential for market power abuse.
To its credit, Viacom is the first of the Big Media companies speaking out against the deal. While a range of businesses across media and technology sectors have come out against the Comcast merger, Viacom is the first major production studio and content producer to weigh in. The LA Times points out that all the other big studios – Walt Disney/ABC, News Corp, Time Warner and Viacom’s step-brother CBS – have remained silent. While these other companies probably share Viacom’s concerns, they appear unwilling to rain on another Big Media brother’s merger – even if they stand to lose by it.
But while Viacom is a media giant, it actually has a history of looking out for diverse and independent programmers.
In a paper from 2000 (PDF link) Andrew Jay Schwartzmen discussed how Viacom had worked with his organization, the Media Access Project, to “promote diversity and open entry in programming markets.” During that time, Viacom was working to keep “one huge telephone company” from buying up a huge cable company “because it threatened to squelch program diversity and competition.”
While we think Viacom’s ownership of so much media brings its own set up problems for diversity of voices in the media, it’s important to acknowledge that the company has been one of the most vocal of the major media companies in supporting independent programming and competition.
Viacom, Albritton, Bloomberg, and host of smaller independent programmers are lining up against this merger in a significant way. Combine that with the ongoing pressure from citizens, public interest groups and lawmakers, and we’ve got one massive critique that regulators have to pay attention.
Maybe it’s Comcast’s threats against Netflix’s streaming video service. Maybe it’s Comcast’s repeatedviolations of the FCC’s Net Neutrality principles. Maybe it’s that Comcast continues to talk out of both sides of its mouth to Congress and bully its competitors. Or maybe it’s just that Comcast’s proposed takeover of NBC-Universal is a raw deal for everyone except Comcast itself.
Whatever the reason, in the waning hours of the government’s review of the Comcast/NBC merger, a flood of new opposition is pouring into the FCC.
In recent weeks, the FCC has received strongly worded warnings from Energy and Commerce Committee Chairman Henry Waxman, Representative Ed Markey, Senator Al Franken and Senator Bernie Sanders about the impact the merger could have on our media. The most recent lawmaker to weigh in is the chair of the Senate Committee on Commerce, Science and Transportation, John D. Rockefeller.
In his letter to the FCC, Sen. Rockefeller wrote, “Simply put, a merger of this magnitude has the power to reshape the media landscape. It can change the way ewe communicate, change the way we share news and information, and change the nature of video entertainment.” He outlined a long list of concerns about the merger, but in the end many came down to one simple worry. “I worry that a media merger of its size has the potential to leave consumers with lesser programming and higher rates.”
Sen. Rockefeller joined a long list of policy makers who believe that this merger has a high hurdle to clear if it is to serve the public interest. As the FCC and the DOJ near the end of their review, we need even more champions of media democracy and media justice to stand up against this merger.
Another day, another story of Comcast bullying suppliers, competitors and customers. If you hadn’t heard, Comcast is the largest cable TV provider, the largest Internet service provider and on it’s way to becoming one of the largest content owners. It seems not a day goes by when someone doesn’t present a new case of Comcast abusing its far too powerful position in the video content and Internet service provider markets. Just in the past few weeks, we’ve seen this power exposed in the following areas: consumer bills, equipment manufacturers, online content suppliers and cable content owners.
Bullying Consumer on Bills
Comcast is a serial rate-hiker, and now Comcast customers in Oregon are the latest victims. Comcast announced that starting next year customers will see a $2 increase in the cost of broadband if they also subscribe to cable and $5 for those who subscribe to broadband alone. With huge profit margins and minimal system upgrade costs, why is Comcast raising customer rates in the middle of a recession?
These increases are a transparent ploy by Comcast to prevent customers from “cutting the cord” or canceling their cable subscriptions and relying on content available over the Internet. With the $5 increase, the cost for standard Internet speed will be $60 per month.
Meanwhile, Comcast offers promotional deals for cable TV and broadband that total $70 per month. With companies like Hulu and Netflix providing consumers’ access to lots of popular content at minimal cost, many people are questioning the need to continue to pay the excessive monthly fees for cable TV. By increasing the stand-alone cost of Internet service, Comcast is limiting the appeal of such options. These motivations are only expected to grow following a merger with NBC-Universal.
Manhandling Equipment Manufacturers
Thanks to an FCC rule, customers are able to buy third-party cable modems and avoid the significant fees associated with renting modems from their cable company. In spite of this, Comcast routinely pushes its customers to rent a modem when they sign up for Internet service. What’s more, Comcast recently increased the cost of renting a cable modem by 66%: from $3 to $5. This makes third party modems (which can run as cheap as $20) a more attractive option for customers.
But Comcast has ways to make it harder for third party modem manufacturers to get their products to market and into consumers’ homes. Recently, the modem manufacturer Zoom Technologies told the FCC that Comcast is forcing it to pay for a whole litany of unnecessary and arbitrary tests and standards (including making Zoom pay for Comcast executives to stay in five-star hotels) in order to win Comcast’s seal of approval. As the largest cable operator, by far, access to Comcast’s customers is paramount to Zoom’s modem’s success. Comcast knows this and appears to be using its market power to limit its customers’ options for third party cable modems like Zoom’s in an effort to maintain profits from excessive rental fees.
Controlling Online Content Carriers
It was recently revealed that Comcast has been using its market power in a way that is likely to increase the costs of doing business for online content companies. Internet service providers rely on transport companies to move traffic requested by a customer from a content owners servers to their network. Recently, Comcast has been accused of unilaterally demanding payment from an Internet transport company to carry traffic to Comcast’s customers.
Their method for doing so is to force the companies that deliver online businesses’ content to pay Comcast money. If that sounds odd to you, you’re right. It’s kind of like you ordering a package to be delivered by FedEx, and then demanding that FedEx pay you a “doorbell ringing fee” for the privilege of delivering that package to your home.
Content owners who don’t go with a company that pays Comcast will be forced to use a delivery company that doesn’t provide direct and reliable delivery. Instead, they may have to settle for a more circuitous route that will delay or degrade how the content you want gets to your computer.
Consequently, these delivery companies have no choice but to pay the new fees in order to provide the content Comcast customers requested – but they’ll ultimately pass those costs onto content providers, who will then pass them along to customers. This means Comcast is ultimately making services like Netflix and Hulu more expensive to provide and, therefore, less attractive options for customers looking to rely on Internet delivered video.
Constraining Cable Content Suppliers
It also turns out that Comcast is actively preventing independent programmers and networks from even making their content available over the Internet. In its contracts with independent cable networks, Comcast is forcing programmers to withhold their content from online video distributors, even if those distributors are willing to pay for it.
One of these distributors, called ivi, has been trying to enter into arrangements to carry cable network content on its online platform. The company quickly discovered that no amount of money would enable it to distribute this content – even if the programmers wanted to sell their content online. Comcast had already locked-down the content that ivi and similar services need to become competitive, thus hamstringing those services from competing against Comcast’s own business.
Offending the Federal Communications Commission
The FCC is the federal agency that is tasked and with protecting consumers and competition from these kinds of abuses of market power. Currently, the agency is reviewing Comcast’s proposed takeover of NBC-Universal – a deal that would give the cable company even greater market power and leverage than it already has.
Accordingly, the merger would seem to offer the perfect setting for the FCC to curb these abuses. Yet Comcast even appears to be bullying the FCC.
First, Comcast has failed to comply with an FCC data request. Back in May 2010, the FCC asked Comcast to submit contracts with independent programmers – the same contracts that prevent these content owners from putting their content on the Internet. That was seven months ago. The FCC is still waiting.
While Comcast is keeping the FCC waiting, it has already started measuring the drapes at NBC – even though it has yet to get the green light from federal regulators.
In September, Comcast announced staffing changes at NBC, but promised it wouldn’t make any more until the deal was sealed.But in November, it reneged on its promise and announced another slew of staff changes even though the merger it still waiting for agency approval. Government officials, including members of Congress, called Comcast’s behavior “presumptuous and arrogant.”
While most of us have little recourse to combat Comcast’s bullying, the FCC has plenty of tools to rein in its bad behavior. As the FCC moves to the final stages of its merger review, regulators should remind Comcast that the agency’s job is to protect consumers and businesses from companies who have gotten too big for their britches.
It’s been a rough week for Comcast. The cable giant has been raked over the coals for fresh allegations of blocking Internet traffic and stifling online innovation. And now, Sen. Bernie Sanders (I-Vt.) is weighing in and expressing his dismay over Comcast’s plan to merge with NBC Universal.
The senator released a video and blog post yesterday urging people to petition the Federal Communications Commission to stop the merger. Watch the video:
Sen. Sanders said:
Comcast, the country’s largest cable provider, and NBC Universal, one of the country’s largest media conglomerates, want to combine forces and pad their bottom line. But at a time when a small number of giant media corporations already control what the American people see, hear, and read, we do not need another media conglomerate with control over the production and distribution of the news. What we need is less concentration of ownership, more diversity, more local ownership, and more viewpoints.
While the merger is in no way finalized, Comcast is arrogantly acting as if it already has a green light, to which Sen. Sanders said:
Comcast is already measuring the drapes. They have announced a new team of executives for NBC. They have launched a joint advertising campaign in Capitol Hill newspapers in order to influence lawmakers. They seem to have forgotten a pesky thing called “the law” in which the FCC and YOU get to weigh in on whether you think this is good for our country.
Follow Sanders’ plea: Tell the FCC you don’t want this merger to happen.
For the past few weeks, Comcast thought it was coasting toward an easy approval of its proposed takeover of NBC-Universal. But there’s been a bump in the road; this week, people started really kicking the tires of this deal, and it quickly became clear that this merger is little more than a jalopy with a fancy hood ornament.
Now it looks like the nonprofit public interest group Consumers Union – the publishers of Consumer Reports – has grabbed the wheel and is driving its message home: Stop this merger. The group announced yesterday that it has rented a mobile billboard that will be making the rounds through D.C. all week, carrying their message to policy makers and the Federal Communications Commission.
The billboard features a cable cord that turns into a snake – a “cable constrictor” – crushing a television (see the ad below). The ad reads: “Don’t Constrict Choice – Reject the Comcast Buyout of NBC”, and directs people to the website SayNoToComcastNBC.org to write the FCC about the proposed deal. But just in case those emails aren’t enough, Consumers Union parked their billboard outside the FCC yesterday, just as new allegations emerged about Comcast’s anti-consumer and anticompetitive behavior.
Parul P. Desai, policy counsel for Consumers Union, said:
Regulators should reject Comcast’s buyout of NBC because it’s a bad deal for consumers and competition. In this economy, consumers should not be at risk of higher prices for cable and Internet service. While the companies have said they won’t engage in anticompetitive practices, Comcast has earned deep distrust. Comcast routinely raises rates, requires customers to buy packages of channels they don’t watch to get the few they do, and slaps stiff penalties on people who want to move to another broadband company for better service. Allowing Comcast to take over the content by NBC Universal could mean consumers would pay higher prices and have fewer media choices.
When it comes to this merger, it’s time for the FCC to hit the brakes.
In 2007, Comcast was caught red-handed blocking legal Internet traffic, and the Federal Communications Commission ordered the company to stop. Looks like that slap on the wrist didn’t work. On Monday new allegations of anticompetitive shenanigans by Comcast came to light. In just the past 24 hours, Comcast has been caught abusing its massive media power, unfairly gouging its competitors and violating Net Neutrality.
These allegations come as Comcast is looking to takeover NBC-Universal in one of the largest media mergers in history. As part of its bid to win federal approval for the merger, Comcast has claimed that it does not possess enough market power to hurt its online video competitors. It has also promised to follow the FCC’s Net Neutrality principles. But it now appears that the company has broken its own promise over and over again.
Ironically, this revelation comes just a week after Comcast executive vice-president David Cohen gave a much lauded DC speech about how “self-regulation” was sufficient to protect the open Internet. It’s clear that Comcast will say anything to get the merger through – even while it is doing the exact opposite.
Ransoming the Future of Media
The New York Timesreports that Comcast has been trying to extract enormous new fees from a company called Level 3. You’ve probably never heard of Level 3 but chances are you have used its service. Level 3 is the company that streams movies for Netflix straight to your laptop or TV. Comcast’s threat: Pay up or Comcast will shut down all of Level 3’s traffic – including Netflix’s streaming service.
Comcast’s core cable business is threatened as people cut the cord and flock to services like Netflix for videos and TV. They are ready to do whatever it takes to shut these services down. One way to do this is to make it more expensive for Netflix to reach its subscribers by exorbitant rates for delivery of its content. Because Comcast has monopoly access to broadband consumers in many communities, it can unilaterally raise costs. You can read more about that case here.
Modem Madness
Another case of Comcast bullying also emerged this week. It has gotten much less attention than the Level 3 issue, but is no less troubling. According to an FCC complaint by Zoom Telephonics, Comcast has been impeding this small start-up company from making and marketing cable modems to sell directly to consumers. What this means for you is that Comcast is trying to stomp out competition and force consumers to rent pricey equipment from them bloating your monthly cable bill.
If you subscribe to Internet service through your cable company, chances are they make you rent a modem from them for about five bucks a month. You could save a lot of money over the long term by buying your own modem, but cable companies like Comcast won’t tell you that.
The law says that consumers must be allowed to be able to buy any modem and connect it to any network, but in practice cable companies do all they can to force you to rent equipment from them, jacking up your bill and crushing competition.
According to Zoom’s complaint, Comcast has taken this behavior to a new level, and has modem compliance requirements that are “unreasonable, irrelevant, time-consuming and costly” – and ultimately prohibit Zoom’s product from reaching consumers.
Comcast has imposed extra fees and bizarre guidelines for manufacturers, and applied them arbitrarily. Even more galling, Comcast mandated that Zoom sponsor five-star hotel boondoggles for Comcast staff in the guise of “factory tours” around the world.
This is no different than mob behavior – extorting the little guy. How is a start-up supposed to break through with these kinds of barriers? Read the full complaint here.
Stifling Broadband Access
The impact of this kind of practice is profound. The FCC’s National Broadband Plan found that the high monthly service fee was the largest adoption barrier for those households who do not yet subscribe to broadband.
These high fees are a direct consequence of anti-competitive and anti-consumer practices. When Comcast makes it harder to get third-party modems, they increase the total price of broadband access by leaving consumers no choice but to rent modems from them at higher rates.
Last year, Comcast increased the monthly rental fee for its cable modems by 66 percent. Clearly they have a stake in making customers rent equipment from them. A Zoom cable modem costs between $59 and $79. If you bought a Zoom modem, it would pay for itself in roughly a year and the modem would be yours to keep if you move and change Internet service providers.
If you rent a modem from Comcast, they want it back at the end of your contract – no matter how much you have paid them for it. If you don’t return it, they’ll charge you another $100.
Repeat Offender
With both the Department of Justice and the FCC nearing the end of their reviews of the Comcast/NBCU merger, Comcast has fired up its lobbying machine. All over Washington, they are touting the meager “public interest” promises they have made, and calling on Congress, regulators and the American public to trust them.
But the truth is that if this merger goes through, they will have even more incentive to engage in the kinds of bad behavior that have become their trademark. Given the size and scale of this merger, its unique mix of vertical and horizontal integration, it will have a deep impact on our media system for years to come. One company controlling so much content and distribution is a clear threat to media diversity and the nascent online video market. Studies have also shown that the merger will raise prices for consumers nationwide.
Comcast wants us to think the merger is a done deal; it has already announced NBC’s new management team. But Comcast has proven that it’s a repeat offender, who simply can’t be trusted. It’s time to rein in this arrogant media giant. The FCC must move quickly to investigate the complaints from Level 3 and Zoom and move forward now to finally adopt real Net Neutrality once and for all.
Tuesday, November 23rd, 2010 by Mitchell Szczepanczyk
Back in 2007, I was heavily involved in work organizing for the Chicago FCC media ownership hearing. I was also the first person to testify in the public comment period of that hearing. It was heartening to help organize this important event with Chicago Media Action and allies, and to see hundreds of Chicagoans turn out at that critical moment.
In 2010, the FCC returned to Chicago to hold one of only a few field hearings on the proposed merger of Comcast and NBC Universal. Despite the breathtaking potential implications of the proposed merger, the 2010 hearing was a more subdued event with a much smaller turnout. In 2007, almost 1,000 people showed up and more than 200 people testified, while only 69 people testified in 2010. Admittedly, the 2007 hearing covered potentially all of media, while the 2010 hearing covered a just single proposed merger (albeit a big one). And we had more than two months to prepare for the 2007 hearing in the late summer and early fall (which included five training sessions held across Chicago), while we had just a few weeks to prepare for the 2010 hearing.
The results of the hearing were more encouraging than I had initially feared. Although at first glance there was a surprising amount of pro-Comcast commentary in the beginning, by the end of the public comment period, pro-democracy forces rallied to the point where the 69 comments were almost evenly split.
Here are the numbers: There were 35 speakers in support of Comcast and 34 critical of Comcast. But what really struck me is how the pro-Comcast speakers barely referred to the merger at all. By our count, only eight of those “Comcast 35″ even mentioned the proposed merger and 29 of those 35 were nonprofit organizations who had received funding or other support directly from Comcast. Not one of those “Comcast 35″ gave any reasons to support the merger that were directly relevant to the merger itself.
For a forum that drew so few people, this analysis helped give the matter and the forum new life, to reach out to those who weren’t involved this summer, and to give another stick to use against the proposed merger.
This is a guest post from Mitchell Szczepanczyk. Mitchell is a software developer and longtime organizer with Chicago Media Action (CMA), who has worked on CMA campaigns around the Federal Communications Commission and corporate media concentration, public access television, public radio and television, community internet initiatives, network neutrality, and the U.S. digital television transition. Mitchell’s website is www.szcz.org.
Comcast wants you to trust them — to really, really trust them.
That’s why the company’s top lobbyist, David Cohen, convened what could best be described as a Kumbaya sing-along in Washington on Monday, to declare Net Neutrality an issue over which Washington needn’t concern itself any longer.
“It’s time to put this [Net Neutrality] debate behind us,” he told an audience of D.C. insiders at the Brookings Institution. “Check the box and move on.”
Now, don’t think this means Comcast has changed its tune on the importance of the open Internet. It’s still trying to kill Net Neutrality. It’s just making a softer sell to convince Washington to forget about protecting the rights of Internet users.
“The courts, the FCC, and the Congress — all valuable institutions filled with capable, conscientious people … but few of them with the background to work out consensus on what are essentially complicated technical issues,” Cohen said.
To whom, then, should we turn to look out for the public interest? Why, the industry itself. According to Cohen, “real self-regulation” with the assistance of an industry-formed advisory group is the answer.
Minding the Hen House
The advisory group Cohen has in mind, known as BITAG, was quickly cobbled together by Verizon, Comcast, AT&T, Microsoft, Intel and other major industry players in June 2010 — just as the Federal Communications Commission was starting to craft rules to safeguard Internet users from an industry push to exert more control over Web content and applications.
Never mind that BITAG’s list of charter members includes the biggest violators of Net Neutrality — not least of all, Comcast.
To that end, Cohen skimmed over Comcast’s covert campaign to block peer-to-peer users on its network — for which it was sanctioned by the FCC.
Cohen would like us to forget that it was Comcast that was caught red-handed blocking lawful Internet traffic in 2007, and that then lied about what it was doing. It was Comcast that tried to evade scrutiny by obstructing public participation in an FCC hearing investigating its Internet blocking. And when the FCC forced the company to stop discriminating against its customers, without even levying a fine, it was Comcast that sued on a technicality to avoid any accountability.
But in an effort to whitewash its record of underhanded activity, Cohen claimed that the public reaction to this debacle taught the company a lesson about being better self-regulators.
“In retrospect,” he said, “we made the wrong decision for the right reasons.” Though those who were blocked from sharing barbershop quartet music and the King James Bible might remember things differently.
Bygones, said Cohen, who now claims Comcast was vindicated and can be trusted with the fate of your Internet — and of NBC Universal, which it hopes to acquire.
Fear and Self-Loathing in Washington
“Unfortunately, the national debate around Net Neutrality and an ‘open Internet’ has been almost exclusively driven by lawyers,” declared Cohen (who is a lawyer). In fact, Comcast hates lawyers so much that the company employs at least 100 of them from 30 different D.C. firms to lobby Washington to get its way.
All of Cohen’s lip service about consensus would be more palatable if his company hadn’t poured so much money into astroturf front groups and lobbyists determined to undermine all efforts to encourage fair competition and a level playing field online.
The only thing you can trust about Comcast is that it seeks to boost its bottom line and serve shareholders by any means possible. That’s the nature of corporations. And naturally, the public shouldn’t expect corporations like Comcast to look out for its best interests.
Public policy is designed for that role — to make it profitable for corporations to behave in ways that don’t harm the rest of us. The only thing that will keep Comcast honest is clear rules of the road and a real watchdog such as the FCC to enforce them.
