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Bloomberg Assesses Comcast's NBCU Deal Compliance

Bloomberg has provided its own assessment of Comcast's compliance with at least one NBCU deal condition. It says Comcast is favoring its own programming, has failed to comply with the news neighborhooding condition, and is avoiding compliance by asserting there are impediments to moving channels. It also says it has evidence of new neighborhoods from which its business news channel has been excluded.

That came in a letter filed with the FCC Tuesday commenting on Comcast's first annual report on its compliance with conditions in the NBCU merger, which Comcast submitted in February. In that report, Comcast said it had delivered, and in some cases over-delivered, on all its promises. Executive VP David Cohen blogged of the report when it was issued:"[O]ur commitments and the conditions, though extensive, have been incorporated into our business activities and become part of the company's 'DNA.'"

Bloomberg saw a break in that DNA chain. It opined in the comments that it has spent more time (14 months) trying unsuccessfully to get Comcast to comply with the neighborhooding condition than it took the FCC to review and approve the deal, and said it has "fresh evidence" that Comcast is not living up to that neighborhooding promise.

Bloomberg asked Comcast to move its business news channel, BTV, adjacent to other news channels in its systems, saying that was what the neighborhooding condition required. Comcast countered that the condition meant that if Comcast created any new neighborhoods, it would have to include unaffiliated channels, but that it had not created any such neighborhoods since the merger.

Bloomberg complained to the FCC, and Comcast countered that complaint. Comcast says Bloomberg's complaint was 1) based on an arbitrary and baseless definition of a news neighborhood as four channels out of five; 2) was inconsistent with the FCC's intent to minimize disruption, such as programmers displaced by the Bloomberg version of neighborhooding and Comcast's customers; and 3) because the condition is prospective while the channel groupings Bloomberg cites were created years before Comcast started negotiating the NBCU deal and, "in most cases," it says, even before Comcast owned the systems.

Bloomberg said in its comments Tuesday that Comcast has created two such neighborhoods since the merger and "in a manner that would violate the news neighborhood condition." It says Comcast has created neighborhoods in Crescent City, Fla., and Claxton, Ga., and that, in addition, "There were at least two instances of moving a Comcast-controlled news channel (MSNBC) into existing neighborhoods to improve its channel position without moving BTV," and pointing to systems in Bethel, Conn., and Etna, N.H.

Bloomberg says Comcast moved CNBC and Fox News next to CNN and CNN Headline News in Crescent City a "neighborhood between Chs. 33 and 37, while leaving BTV at Ch. 251. In Claxton, Bloomberg says, the cable operator grouped CNBC, MSNBC, CNN, HLN and Fox News between Chs. 28 and 32, but left BTV at ch, 251 there, too. "As Bloomberg has previously advised the FCC," the company said in its filing, "these five channels account for nearly all cable news viewers and advertising revenues."

Comcast has plenty to say in response to Bloomberg's challenge.

"Bloomberg continues to willfully misinterpret the 'neighborhooding' condition in the FCC's Comcast NBCUniversal transaction Order. Comcast does not 'neighborhood' news channels in the way Bloomberg seeks to be repositioned,"  the company said in a statement Tuesday. "Bloomberg is not entitled to any relief pursuant to its threatened complaint. And its continued rehashing of the same arguments it has previously made smacks of desperation.

If Comcast is forced to do what Bloomberg wants the FCC to mandate beyond the requirements of the FCC Order, millions of customers will be subject to disruption and confusion required by massive channel realignments across the country, all to benefit an already thriving, $30 billion media company. It is hard to imagine a more anti-consumer result that would be less in the public interest.

"Any complaints about Comcast's commitment to independent programming are similarly without merit. Since the close of the transaction, Comcast has increased carriage of independent networks, including diverse networks such as the Africa Channel by two million homes, Mnet by four million homes, and TVOne by 600,000 homes. Comcast also expanded distribution of seven Hispanic or Spanish-language independent networks by 14 million homes, surpassing the three network and 10 million homes target in its commitment. "

Actually, TVOne is part owned by Comcast, so would not qualify as an independent, a point Comcast critics were quick to point out. Comcast responded that it was talking about both diversity and independents. "it is true that TVOne has Comcast ownership, so it should have been clarified," said a spokesperson for the company.