Comcast/NBC: No Sure Thing
Posted February 5th, 2010 by Josh Stearns
Senator Al Franken stole the show at this week’s Senate hearing on Comcast’s proposed takeover of NBC-Universal. As a former employee of NBC and a long-time media insider, Franken unleashed a scathing critique of both Comcast and NBC, outlining their long history as corporate bad actors with a string of broken promises.
Franken drew on his years as a writer and performer on “Saturday Night Live,” arguing that previous actions by both companies give him “reason to be very concerned about this potential merger.” However, Franken did not just feel betrayed by past actions. At the hearing, he argued that Comcast CEO Brian Roberts had misled him about the company’s commitment to public interest concessions. It turns out that Comcast promised Senator Franken that FCC rules would protect the public and prevent the company from discriminating against competing video distributors and programmers even while Comcast was trying to get those rules thrown out.
Witnesses at the hearing pointed out that, in addition to challenging the existence of rules, Comcast is the frequent subject of complaints from rival programmers and cable operators for violating the rules. The company has also been cited for lying to the FCC about blocking Internet users’ access to a competing a video application.
“You’ll have to excuse me if I don’t trust these promises,” Franken said in his remarks.
While Sen. Franken was the most vocal in his concerns about this merger, he was far from alone. Sen. Kohl, the chairman of the subcommittee on Antitrust, Competition Policy and Consumer Rights, Sen. Klobuchar and Sen. Feingold were also skeptical about the deal. There was a significant amount of concern about what this deal would mean for local affiliate stations, local sports coverage, small businesses and jobs.
Andy Schwartzman from the Media Access Project and Mark Cooper of Consumers Federation of America offered powerful arguments against the merger.
Schwartzman focused his criticism on the ways this merger would impact the nation at large. “Concentration of control in the mass media poses unique questions for policymakers and regulators,” Schwartzman argued. “Unlike any other line of business, media properties raise important questions which go to the very nature of democratic self-governance.”
He pointed to three threats this merger poses: It would increase Comcast’s power to squeeze out independent programmers with diverse editorial perspectives; give the merged company vastly increased power over content distribution markets; and, jeopardize development of a free and open Internet. Cooper, instead, honed in on the unique local issues raised by this deal. Comcast competes head to head with NBC for eyeballs and advertising revenue in at least 11 cities. These 11 markets account for nearly a quarter of U.S. TV households.
Cooper argued that the decreased competition in these cities will have a chilling effect, leading to a greater consolidation of voices and viewpoints.
“NBC and Comcast do not sell widgets,” Cooper reminded the Senators. “They sell news and information and access to the primary platforms Americans use to receive this news and information. Control over production and distribution of information has critical implications for society and democracy.” Franken echoed this statement, “It matters who owns our media. When one company owns the production and distribution of content it gives reason for concern.”
Comcast CEO Brian Roberts stammered through the afternoon, clearly caught off guard by the hard questioning. Members of both the House and the Senate ended their hearings calling for further investigation, and future hearings with the Department of Justice and the Federal Communications Commission.
One thing was clear at the end of the day: This deal is far from a sure thing.
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February 9th, 2010 at 2:34 am