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ACA: Comcast-NBCU merger worse than we thought

Thu, 07/22/2010 - 8:10am
Brian Santo

Documents from Comcast and from NBC Universal show the two have every intention of leveraging their combined market power to the detriment of their competitors should they be allowed to merge, according to the American Cable Association.

The ACA said it has reviewed the documents the two companies have filed with the FCC, and it asserts that the plans of Comcast and NBC Universal are actually worse than the ACA initially feared. It renewed its demands that an approval of the merger be contingent upon the imposition of strong conditions.

Because the documents are confidential, however, the association is not at liberty to say why. Its public response filed with the FCC is highly redacted.

"Based on the record before it, the FCC simply cannot find that the proposed combination is in the public interest without adopting conditions that will address the harms this transaction will generate," ACA President and CEO Matthew Polka said.

From the time the merger was announced last December, the ACA has highlighted the anti-competitive nature of the Comcast-NBCU combination, saying it required the FCC and the Department of Justice to impose meaningful conditions to protect consumers and competition.

Although Comcast and NBCU have maintained that the proposed transaction would present no horizontal or vertical competitive concerns, the ACA disagrees with both contentions.

"The Comcast-NBCU transaction is the most serious media merger in years, justifying complete, robust and durable remedies to address harms that will erupt on a local, regional and national basis," Polka said. "Approving the biggest media merger in a decade without meaningful conditions would deal a serious setback to federal competition policy, with the result that consumers will be forced to pay more for the same cable and broadcast programming that they are receiving today."

The ACA has maintained that combining Comcast's programming assets (primarily nine regional sports networks) with NBC's large stable of owned-and-operated TV stations and marquee cable networks (such as No. 1-ranked USA Network) would give the combined entity the incentive and ability to use its horizontal market power to charge excessive programming fees that will be passed through to consumers of multichannel video programming distributors (MVPDs).

The ACA also argued that the combination of Comcast and NBCU would result in harmful vertical integration, because uniting the largest cable operator with a major cable/broadcast programmer would give the new company the incentive and ability to extract higher programming rates from MVPDs that compete against Comcast cable systems.

More Broadband Direct 7/22/10:

•  AT&T has Q2 net loss of broadband subs
•  Motorola sues Huawei over trade secrets
•  ACA: Comcast-NBCU merger worse than we thought
•  Cable-Tec to focus on IP technologies
•  Netflix's Q2 profit shines, stock still loses luster
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