Comcast: Reports Confirm Benefits Of NBCU Deal

Comcast has turned in two FCC-requested reports on the NBCU
joint venture and says they confirm its earlier assertions about the deal's
public interest benefits and its lack of adverse impact on online video

The FCC stopped the clock on its review of the merger
awaiting the two reports. It has also extended the comment deadline to
accommodate reaction to the court decision overturning its network management
ruling in Comcast/BitTorrent.

According to a letter submitted to the FCC along with the
reports, Comcast quotes Dr. Gregory Rosston from his economic analysis of the
deal, as concluding it "is likely to result in synergies and changes in
incentives that will stimulate increased investment by Comcast in programming
and distribution, and this, in turn, will broaden and accelerate innovation in
video distribution platforms...and increase the quantity, quality, and
convenience of video viewing by viewers."

The other report, on online video distribution, by Drs. Mark
Israel and Michael Katz, confirms, says Comcast, that "the proposed
transaction does not threaten competition in the distribution of long-form,
professional-quality video programming, notably the provision of such
programming via the Internet."

The report says that as long as online video is a
complementary service to traditional multichannel video delivery, there is
"clearly no basis for concern" that Comcast could
"foreclose" online video competitors, but it goes further, saying
that even if online were to become a viable competitive substitute, the deal
would not "enhance" the economic incentive for Comcast to deny NBCU
programming to competitors.

Comcast adds in a footnote to that point that under the
terms of the joint venture, the directors and officers would violate their
fiduciary duties if they "made business decisions that intentionally
sacrificed joint venture profits in order to increase Comcast's MVPD profits."

"It's consistent with all of Comcast's prior filings," says Media Access Project's Andrew Schwartzman, "which is to say: 'Nothing is a problem, and competition flourishes.' That is hard to reconcile with the ever-increasing rates that cable operators charge and the diminishing competition in the video programming marketplace."

MAP is one of several groups that have expressed opposition to the proposed $30 billion joint venture.

"Of course we will carefully examine the data submitted," said Corie Wright, counsel for another deal critic, Free Press. "But we will not take Comcast's word that this merger is the best thing since sliced bread. Common sense dictates that this deal will harm the public and emerging online video market. It was wise of the commission to request these additional studies from Comcast. This illustrates just how far-reaching the implications of the merger will be and the extensive amount of analysis that needs to be done to fully understand the impact it will have on consumers."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.