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!
Question:Two federal agencies review the same merger. Both agencies have jurisdiction to review the merger under U.S. law. The agencies review the merger during the same time period, and ultimately they reach the same decision – to approve the merger with conditions. One is right, the other is wrong. Why?
This is not an SAT question – it really happened.
On Tuesday, the Department of Justice and the Federal Communications Commission both approved the merger of Comcast Corporation, the nation’s largest cable and internet service provider, with NBC Universal, one of the country’s largest and oldest content companies. With the blessing of both agencies, the new Comcast-NBC behemoth, will not only own a lot of the content you watch, (1 out of every 5 television viewing hours) — but also the primary ways you watch it (broadcasting, cable and the Internet).
The DOJ and FCC have different responsibilities when it comes to merger review. The DOJ reviews mergers under the antitrust laws (namely, the Clayton Act), while the FCC examines proposed transactions under the public interest standard of the Communications Act. The distinction is a pretty big one: the DOJ cannot block a merger unless it would substantially decrease competition. Conversely, the FCC cannot approve a merger unless it enhances public interest goals like competition, diversity, and localism.
In reviewing the merger, the two agencies worked together to craft conditions to mitigate specific harms that would be caused in the market. The DOJ consent decree and the FCC merger order parallel each other in many important aspects. Both adopted Network Neutrality protections which prohibit Comcast from favoring delivery of NBC content online, as well as conditions preventing Comcast from refusing outright to sell NBC programming to competing Internet video distributors, like Netflix to starve them of content and run them out of business.
We can quibble elsewhere as to whether the DOJ could have done more to protect competition. Suffice to say that, by adopting these conditions, the DOJ attempted to preserve the competitive environment that existed before the merger. The FCC, too, sought to maintain the pre-merger status quo.
The problem is that the FCC’s job is to make sure that the merger is in the public interest — not to simply preserve the status quo.
If you read the FCC’s order approving the merger, you will search in vain for anything that says that the Comcast-NBC merger itself will result in more competition, lower prices, or more diversity. That’s because it won’t. Neither will our media system be better for this deal having gone through. Indeed, all signs points to the exact opposite outcome.
The FCC justified the merger on the grounds that the new company would have “potential flexibility for innovation and some efficiencies of scale and scope.” Roughly translated, that means that Comcast can save itself some cash by streamlining its businesses. But don’t expect those savings to get passed onto consumers. That’s not exactly a ringing endorsement of any tangible public benefits.
The FCC claims that the conditions it is imposing will “neutralize the possible negative impacts” of the merger. But, even assuming that is true, it still falls far short of promoting the public interest. Conditions and commitments will expire and, when they do, the problems they were intended to fix will resurface.
True, the FCC did adopt Comcast and NBC’s voluntary commitments, which include offering more local programming and cheaper broadband for a few years after the merger is consummated. Merger aside, these are good things. However, they will be difficult to monitor and enforce, and they don’t begin to balance out the deeper harms to competition and media diversity caused by the merger.
Moreover, these promises have nothing to do with the merger. Comcast did not need to buy NBC in order to offer affordable broadband to subscribers. And NBC did not need to be bought by Comcast for its broadcast stations to offer better service to local communities. These commitments merely represent things that both companies should have been doing in the first place.
Protecting the status quo is not the FCC’s mandate. What’s more, given the current sorry state of the media industry, protecting the status quo is clearly not in the public interest. That’s why, when all is said and done, and we look back on the negative impacts of this deal, the fault will rest squarely with the FCC.
Today, the Federal Communications Commission is expected to bless the merger of Comcast, the nation’s largest cable and residential Internet provider, with NBC-Universal. The Justice Department is expected to follow suit right away, removing the last obstacle to the unprecedented consolidation of media and Internet power in the hands of one company.
You should be afraid and mad as hell.
The new Comcast will control an obscene number of media outlets, including the NBC broadcast network, numerous cable channels, two dozen local NBC and Telemundo stations, movie studios, online video portals, and the physical network that distributes that media content to millions of Americans through Internet and cable connections.
Culmination of the deal, combined with the FCC’s recent, loophole-ridden “Net Neutrality” rules, sets the table for Comcast to turn the Internet into cable television, where it has the ability to speed up its content, slow down or block its competitors such as Netflix, and hike the rates for its programming and services. We’ll all end up paying more — whether you’re a Comcast subscriber or not.
More Broken Promises
The merger further squeezes what’s left of independent, diverse voices from the television dial, laying waste to President Barack Obama’s promise to reign in runaway media consolidation. As a candidate in June 2008, he said:
I strongly favor diversity of ownership of outlets and protection against the excessive concentration of power in the hands of any one corporation, interest or small group. I strongly believe that all citizens should be able to receive information from the broadest range of sources.
Where’s that Barack Obama today? He’s on the editorial page of the Wall Street Journal announcing an executive order that will “make sure we avoid excessive, inconsistent and redundant regulation,” focusing on rules that “stifle job creation and make our economy less competitive.” Given the president’s long list of massive compromises to corporate lobbyists during his first two years, today’s gesture to Wall Street is galling.
This is the same Obama who promised to “take a backseat to no one” on Net Neutrality before applauding the FCC’s AT&T-approved Internet rule. It’s the same Obama who promised to provide the public option on health care and to end the massive bonuses to Wall Street titans…the list of broken promises is far longer than space allows.
And it’s the same Obama who, in the same 2008 interview about media consolidation, said:
There is a clear need in this country for the reinvigoration of antitrust enforcement. … to step up review of merger activity and take effective action to stop or restructure those mergers that are likely to harm consumer welfare.
So much for that one, too.
President Obama is being squeezed by a corrupt Washington that is run by industry lobbyists, fake grassroots groups, massive political spending and PR machines that make the most basic public interest protections impossible to advance. But rather than tell that story, dig in, and fight like a true leader would, Obama has chosen to hire corporate-friendly advisors, compromise on the most crucial substance, and attempt to eke out weak, symbolic, half-victories gift-wrapped in flowery oratory and spin. It’s a losing strategy that has become brutally transparent.
Opening Pandora’s Box
Why should you care about a business deal between a couple of companies?
This merger will touch all corners of the media market, and you won’t be immune. Comcast will jack up the prices that other cable and online distributers pay for NBC content, and those prices will be passed to you. That means higher cable and Internet bills, even if you don’t subscribe to Comcast.
Comcast and the FCC Chairman argue that there are “conditions” applied to the merger that protect the public, but they fail to mention that the key provisions are either voluntary (no, that’s not a typo), or expire after a few years. Then, all bets are off, as the merger squeezes out what’s left of independent, diverse voices from television dials, and forever changes the Internet as we know it.
As television, radio, phone and other services become Internet-based, cable internet service is becoming the only connection that’s fast enough to handle streaming video and cutting-edge applications. That means you’re stuck with whatever Comcast and their cable buddies dish out. And thanks to Obama FCC Chairman Julius Genachowski, it’s gonna be some nasty gruel.
While pushing through this deal, the FCC chair completely ignored the lack of competition in the Internet service provider market. As former Obama White House technology adviser Susan Crawford writes, “In 2011, as the telcos continue to sink, we’re going to need to confront this natural monopoly problem head-on. How do we ensure a nationwide, affordable, better-than-all-the-competition high-speed Internet service…?”
And it will only be a matter of time before more companies follow Comcast’s lead and start pursuing new mergers. The FCC’s blessing of Comcast and NBC will embolden companies like AT&T or Verizon, to try to gobble up content providers such as Disney and CBS, creating a new era of media consolidation where even fewer companies control the content you watch and all the ways you want to watch it.
If I sound a little bitter, it’s because the Comcast-NBC merger is truly a disaster for anyone who hopes the American public might someday emerge from the propaganda morass that is embodied by cable television, and now threatens to consume the internet.
Our democracy is certain to fail if we cannot figure out a way to foster media that is less sensational and superficial, and more thoughtful and informative. That’s a goal that is antithetical to the programming you can expect from a merged Comcast/NBC, where profit pressures and blind corporate ideology will ensure substandard fare.
In the credit-where-it’s due category, Democratic FCC Commissioner and public interest stalwart Michael Copps is expected to vote against the merger in a demonstration of principle that is all too rare in Washington. My hat is off to you, Commissioner.
But you, Mr. Obama. You said you “strongly believe that all citizens should be able to receive information from the broadest range of sources,” yet your agencies are approving this deal while you watch quietly, and use the merger to demonstrate your corporate street cred.
Does the strength of your beliefs mean nothing? If so, keep doing what you’re doing, and watch your administration fall ever farther out of favor with real people across the country, both left and right.
Today, you can chalk up another victory for the K Street lobbyists whose approval you seek, and another crushing defeat for the American people whose interests you are supposed to protect.
The Federal Communications Commission is about to give its blessing to the biggest media merger in a decade. Approving the Comcast-NBC merger is a big mistake. Recently, Sen. Al Franken (D-Minn.) warned that “we could end up with a few corporate giants in contol of the flow of information in America.”
Public interest groups, small broadcasters, independent content providers and small tech companies have been fighting this deal for a year. We caught up with a few of them at the Open Video Conference in New York City last October to hear why they oppose the merger.
Public Knowledge Staff Attorney Michael Weinberg worries about a single company owning lots of video content, TV channels, Internet pipes and a cable system.
Mehan Jayasuriya, director of outreach and new media for Public Knowledge, said that Internet service providers like Comcast and content creators like NBC have every incentive to crowd out user-generated video from the online video market.
BlipTV CTO Justin Day describes how the merger could spell trouble for online video companies.
And Lisette Voytko of DotTV muses about the future of online video and Hulu in a post-merger future.
As the Federal Communications Commission considers approving the Comcast/NBC-Universal merger, Sen. Al Franken (D.-Minn.) has long been pushing back against the merger. In his latest video, Sen. Franken warns that if the FCC approves the deal, “We could end up with a few corporate giants in control of the flow of information in America.” Watch the video, and then take action.
Today, Free Press placed a full page ad opposing the Comcast/NBC merger in The Hill, a Washington, D.C. paper that covers affairs on Capitol Hill. The ad was a series of statistics – pulled from press reports about the merger – that outlines Comcast’s use of money, influence and misinformation to push their merger through, even though a number of public interest groups and other media companies have shown that it is not in the public interest. See the ad here:
Beyond the numbers, why is the Comcast/NBC merger a disaster for the public?
This is an incredibly complex merger that has implications for media online, on cable, and on over the air broadcasts. It will bring together the nation’s largest cable and Internet company with one of America’s oldest news and entertainment producers. We couldn’t get into the details in the space of the ad, but here we can.
First and foremost, media ownership matters. It shapes editorial policies, it impacts what issues are covered and how they are covered, and it defines who has access to the airwaves and the Web. In our research at Free Press, we have shown how media consolidation has led to fewer media companies owned by women and people of color, and how profit drives have led to companies gutting newsrooms, leading. to less and less access for local media makers and independent producers. Democracy can’t exist without an informed public. But media consolidation like this means fewer sources of news, opinion and information. (See more here: http://www.freepress.net/policy/ownership)
This merger is particularly troubling because of Comcast’s long standing attacks on Net Neutrality, which many have called the “free speech issue of our time.” It’s the idea that Internet service providers (like Comcast) can’t discriminate online, privileging some content and voices over others. After this merger, Comcast will control even more of our news and entertainment, and have even more of an incentive to drive people to their own content. (See more on journalism and Net Neutrality: http://bit.ly/1jIrlo) (This merger will also hit people’s pocketbooks. For more on cost to consumers: http://www.americancable.org/node/2502)
In the end, the Federal Communications Commission has a mandate to only approve this merger if it is explicitly in the public’s interest. That’s a heavy burden, and I have not seen anything to convince me that the merger of these two companies can live up to that standard.
One of the key concerns with the pending mega-merger is what it will mean for one company to control a community’s access to news and information online, on cable, and on broadcast stations. In eleven cities around the country, where Comcast is already the dominant cable company and Internet service provider, it’s poised to swallow up their local NBC and Telemundo broadcast stations, too.
To placate policymaker’s concerns, Comcast has been making a series of promises regarding their commitment to local news. At first it promised to preserve and maintain the status quo of news on NBC stations. Then it promised to increase news and public affairs programming by 1,000 additional hours a year (which works out to only an extra 16 minutes per day, per station). Now Comcast is promising to forge partnerships between NBC stations and local nonprofit news sites.
In its December 23 letter to Federal Communications Commission Chairman Julius Genachowski, Comcast specifically highlighted the partnership between Voice of San Diego (VOSD) and KNSD, San Diego’s NBC station. Comcast suggested that after the merger they would support similar partnerships in at least five cities for three years. This commitment has been heralded by some as an exciting new opportunity for nonprofit news at a time when many of these innovative projects are seeking sustainability.
Promises Are Made to Be Broken
As I have studied journalism collaborations, I have watched the VOSD/NBC partnership carefully and believe they have set up a productive collaboration that is serving San Diego well. But I think it is vital to unpack Comcast’s promise and take a hard look at what this really might mean for local news.
First, it must be said, that this is just a promise, and that if the history of media mergers is instructive, many pre-merger promises are not followed through on once the deals are approved. For example, in 2002 when NBCU was trying to buy Telemundo, it promised to expand local Spanish language news programming; but once the merger was approved, NBCU laid off 700 Telemundo employees and eliminated local newscasts at Telemundo stations in Houston, Dallas, Denver, San Jose and Phoenix, replacing them with a single “hubbed” newscast out of Fort Worth, Texas. Some of these same cities are now facing the prospect of a Comcast local media monopoly, and Comcast has not made one commitment to invest in Spanish language news and public affairs.
In fact, Comcast has a long history of opposing and obstructing local journalism efforts at public access and community television stations. As part of the agreements that give cable companies local monopolies, companies like Comcast are supposed to provide channels and support for public, educational and government access stations. For example, in Philadelphia, Comcast’s home town, the cable giant blocked the establishment of local community TV stations for decades. Given this history, Comcast’s sudden commitment to nonprofit news seems suspect.
Doing the Math
As noted above, Comcast’s past promise to provide an additional 1,000 hours of news and public affairs doesn’t add up to much. It is unclear whether this new commitment to work with nonprofit news organizations is an add-on or will be counted against that minor increase in news programming.
Either way, Comcast has only promised support for three years and it has taken VOSD roughly five years to build the collaborative relationship with KNSD. Collaborations are hard work and take immense time, energy and trust. Comcast’s assertion that “within 12 months of the closing of the transaction, at least half of the 10 owned-and-operated NBC stations will have in place cooperative arrangements with locally focused non-profit news organizations” will not simply make it so. In addition, based on the VOSD example, these partnerships will not mean an end to fundraising concerns for local nonprofit news sites. VOSD has a number of partners in addition to NBC, and they envision these “content services” making up a total of just 10 percent of their revenue. Clearly these partnerships provide important financial support and help distribute VOSD reporting to a broader audience, but we should not mistake Comcast’s promise to launch five more collaborations as a boon for local news — or a fair trade for the cutbacks and diminishing competition we’re sure to see.
Note too that Comcast did not actually commit to broadcasting any news produced through the collaboration. In its letter, Comcast writes that NBC and its stations will not be “obligated to broadcast, publish on a NBCU-controlled website, or otherwise exhibit or endorse any material produced by an Online News Partner.”
Localism, Diversity and the Public Interest
In making the case for this new strategy, Comcast tried to appeal to the core mission of the FCC, which is to foster and promote localism, diversity and the public interest. Comcast argues that “cooperative arrangements such as this advance the commission’s interest in ensuring that all Americans have access to vibrant, diverse sources of news and information.”
But how does outsourcing an NBC station’s news production to a local nonprofit help expand the diversity of voices and viewpoints in local media? When the FCC grants a company a broadcast license (for free, mind you) that company enters a deal with the American public and commits to serve the public interest. Most broadcast stations have abdicated that responsibility, gutting their newsrooms and watering down the evening news to nearly nothing.
In fact, many journalism start-ups like Voice of San Diego explicitly point to the failings of commercial media as the impetus for their work. The fact that Comcast has honed in on the Voice of San Diego partnership with its local NBC station highlights how vital these independent nonprofit online newsrooms are becoming. To be clear, I spend my days working to find new ways to support quality local news and investigative journalism, and I’m eager to identify new funding streams. However, those of us concerned about the future of news need to stand up against further media consolidation while fighting to make space for new ventures.
There is no way to sugar-coat it: This merger is a disaster. Allowing Comcast to takeover NBC is an endorsement of a troubling new kind of media merger and paves the way for higher prices, fewer choices and more consolidation. The last minute promises Comcast is dolling out do little to address the damage that will be done.
