Archive for January, 2010
Thursday, January 28th, 2010 by Josh Stearns
Comcast just filed its merger paperwork with the FCC. As part of its takeover, Comcast wants to get its hands on local NBC and Telemundo stations owned and operated by NBC across the nation. More media consolidation in local news is never a good thing, but this deal is particularly bad for certain communities.
NBC owns local stations in eleven communities that are already have Comcast cable and Internet service. If this merger goes through, in each community one company will control content online, on cable and over the airwaves.
Here are the stations that are in Comcast’s crosshairs:
- New York City – NBC New York (WNBC)
- Chicago – NBC Chicago (WMAQ) and Telemundo WSNS
- Philadelphia – NBC Philadelphia (WCAU)
- San Francisco – NBC Bay Area (KNTV) and Telemundo KSTS
- Boston – Telemundo WNEU
- Washington DC – NBC Washington (WRC)
- Houston – Telemundo KTMD
- Miami – NBC Miami (WTVJ) and Telemundo WSCV
- Denver – Telemundo KDEN and KMAS
- Hartford – NBC Connecticut (WVIT)
- Fresno – Telemundo KNSO
Even though this merger promises to lead to higher prices, fewer choices and fewer local jobs – Comcast told the FCC today that the deal would be good for local communities. Free Press Executive Director Josh Silver responded to this false assertion, saying, “Comcast’s claims that this merger will benefit consumers are positively Orwellian. The idea that it is magically going to be consumer friendly after it gets bigger doesn’t pass the laugh test. Regulators at FCC and the Department of Justice should cut through the rhetoric and put a spotlight on the real problems with this kind of unprecedented media consolidation.”
Public pressure is building for the government to stop the Comcast takeover of NBC. Since the deal was announced, 24,000 Americans have already said they oppose it. Today we will be delivering those public complaints to the FCC, and Congress is scheduled to hold hearings on the proposed takeover on February 4, 2010.
To help stop the merger, and protect news and information for local communities, go to: www.freepress.net/comcast
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Thursday, January 14th, 2010 by Josh Stearns
The FCC is gearing up to review the rules on how much media any one company can own. In 2003 and 2007, citizens across the country stood up against more media consolidation, but the FCC didn’t listen. Both times, the Senate and the courts had to step in to stop the rules from taking effect.
Will it be any different this time around? Not if industry groups have their way.
This week, the FCC held an initial hearing on the economic issues affecting the media industry, and it looks as though everyone has a bad case of amnesia. Bankers and representatives from investment companies and the broadcast industry repeatedly argued for more media consolidation.
These executives bemoaned their economic woes – mounting debt, declining ad revenue, shifts in technology, etc., while conveniently ignoring the fact that they dug this hole themselves. Their debt is the result of years of spending sprees, with billions of dollars spent buying up media holdings since the media ownership rules were first relaxed more than a decade ago.
Now here they are again, peddling more media consolidation as the solution to their economic troubles. It’s ironic, and incredibly maddening.
The industry is still trying to dupe the FCC into thinking that more consolidation is the answer. The FCC shouldn’t be fooled by the same arguments again.
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Monday, January 11th, 2010 by Adam Lynn
The Department of Justice announced last week that it will review Comcast’s proposed takeover of NBC Universal. When this deal was announced a month ago, we raised a number of public interest concerns. One of the biggest: If right now we rarely see independent, diverse and groundbreaking programming, it will become nearly extinct if this merger is approved.
It is appropriate to start with a primer about how TV shows reach our living rooms. The general idea is that the programmer brings the content and the cable operator brings the subscribers, and these are the key bargaining chips for both sides during negotiations. Big programmers, say, NBC Universal, have a huge number of cable channels, which serve as a big hammer when negotiating for carriage – or a slot on a cable system – with cable companies.
Big programmers leverage this power when negotiating with small cable operators, which don’t have the same market power as big cable operators to strike deals with big programmers. That is, NBC can afford to lose these subscribers much more easily than the small cable guys can afford to lose premium content. The big programmers thus routinely fleece small cable operators.
On the flip side, big cable operators like Comcast have so many subscribers that they have the upper hand in negotiations and can force agreements that favor them. Now, when large cable operators negotiate with large programmers, they typically come to mutually beneficial terms. If there is a standoff, it doesn’t last long because both sides recognize they won’t go far without the other. Small or upstart programmers, however, aren’t so lucky. They consistently get the short end of the stick in their dealings with companies like Comcast.
After the announcement of the Comcast-NBC merger, Comcast submitted a filing to the Securities and Exchange Commission. For the first time, the filing publicly disclosed the companies Comcast owns a partial stake in, and the news was both unsurprising and worrisome. The media properties listed in Comcast’s filing include:
These are all startup networks: Why and how does Comcast have an ownership stake in them? It’s not hard to understand. These startups did what they had to do to get carriage on Comcast, and that meant relinquishing shares of their companies to the cable giant.
As one industry observer noted, “If it doesn’t have Fox in front of its name or NBC behind it, it’s going to have trouble.” Certainly sounds like market dominance to me.
Comcast’s outsized market power means it can make outrageous demands of content companies that want to air their programming. For instance, the recently created nonprofit Olympic Network (started by the U.S. Olympic Committee) had to offer an estimated “$30-40M [million] in annual advertising” before Comcast would agree to carry the network. These arrangements are rarely leaked to the press, so it is unknown how many other upstarts had to make similar concessions.
What about no-name programmers that can’t afford to offer tens of millions of dollars for a slot on Comcast’s lineup? When true upstarts pitch their networks to the likes of Comcast, they don’t even have a prayer. When the Horror Channel tried to get picked up by Comcast, the company passed, deciding instead to create its own horror network called “FEARnet.” The lesson is that if you don’t have backing from a large programmer or distributor, your best hope is to be buried in the on-demand menu somewhere.
These instances are proof positive that large programmers like NBC and large cable operators like Comcast already have too much market power. Allowing the two to combine will only further tilt the scales in their favor. Comcast can take its less known cable channels and lump them with NBC’s, forcing distributors to air these channels, a practice known as bundling. Just think about this degree of market power – the largest cable operator owning one of the largest stables of cable networks. The problems I’ve described here will only get worse.
Meanwhile, other companies will likely try to match this market power through consolidation. As usual, the biggest losers will be small networks and cable operators, and last but not least, the public. Any increase in costs will surely be passed directly on to you. And this will further cement the reality that you have no chance of viewing truly independent content. The Comcast-NBC merger is a no-win situation for the public and must be stopped.
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Friday, January 8th, 2010 by Josh Stearns
The new year has started with a renewed focus on Comcast’s proposed merger with NBC Universal, and it’s not good news for the cable giant. Over the past two days, federal investigators, public interest groups, industry associations and a wide array of nonprofits from across the political spectrum have raised red flags about the merger.
This week, the Washington Post and the Wall Street Journal reported that the Department of Justice has already decided to investigate the antitrust implications of the merger — even though Comcast has yet to file its merger paperwork with the agency. This is a strong statement from the Obama administration and a positive sign that they may follow through on Obama’s campaign statements about reinvigorating antitrust regulation and stopping media consolidation.
Christine Varney, the head of the antitrust division at the DOJ, has taken aggressive positions on vertical mergers in the past. In a 1995 speech, she argued that “Vertical acquisitions can be anticompetitive. Vertical mergers can create or raise entry barriers that lead to higher prices or lower quality or innovation for consumers.”
Yesterday, an ad hoc group of industry, labor and public interest organizations from both the left and the right joined together to express grave concern about the proposed takeover in an open letter to President Obama and Congress. Groups that seldom work on the same side of issues came together around the idea that this merger of media giants would only hurt the media landscape and further diminish diverse and independent voices.
The letter states, “A merger of this size and scope will have a devastating effect on the media marketplace. It will result in less competition, higher consumer costs and fewer content choices. It also will give one company unprecedented control over innovative new media that offer news, information, entertainment and cultural programming through emerging technologies.” Read the full letter.
Momentum is building against this deal, but we need citizens to keep speaking out against the merger. Add your voice.
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