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FCC Gets Earful On Comcast/NBCU Impact

Small cable operators, an independent programmer, and a former FCC commissioner led the afternoon prodding of the Comcast/NBCU merger at the FCC's Chicago forum Tuesday.

Like the first panel of the day--on online access issues--the participants were weighted toward those with criticisms of the propsed joint venture.

The most critical was Tyrone Brown, former FCC commissioner and president of Media Access Project, though at times he seemed to come both to praise and bury Caesar.

Brown gave Comcast/NBCU props as a "marvel of enterprise," that had become successful through courage, vision and toughness, something he said "I truly, truly admire." Brown said he was impressed, make that "very impressed" with Comcast and NBCU's commitments to advance minority participation in the programming and operations of the companies. He said that if they were made enforceable conditions of the deal, they would be "clear plusses." He went as far to say that in a close call, they would make him "sympathetic" to the merger. Given MAP's strong criticisms of the deal to date, it almost sounded like the beginnings of a big story.

But he was quick to take the bloom off that rose and replace it with a thorn. He said with the play for NBCU, they "are going a couple of bridges too far." He said that the combination of assets, particularly where Comcast owned systems and NBC owned stations, it would have the "market-moving" power that it would deploy to the detriment of competing MVPDs and the viewing public. Brown said he was also speaking as a sometime minority entrepreneur
in the communications business.

He said the "assured adverse impact" on the marketplace of ideas outweighed any "less certain" benefits from Comcast's diversity commitments.

The American Cable Association tag-teamed its challenge to Comcast, with both Colleen Abdoulah, president of WOW!, and outside counsel Tom Cohen weighing in (Cohen was subbing for economist William Rogerson).
Cohen said that either way you look at it, as a horizontal or vertical merger, the deal will cause significant harms. Abdoulah said if the deal does not have strong conditions, "Comcast will have greater incentive and ability to deny access and charge higher fees to WOW for NBCU's broadcast stations and national cable networks, knowing that our customers could become theirs. These harms also flow to online distribution. We are concerned that Comcast will not grant us the rights to allow our customers to view combined Comcast‐NBCU programming online," she said.

Ken Solomon, who heads both Tennis channel and Ovation, said if the deal were approved, and he has major concerns about it, the FCC should require Comcast to treat affiliated and non-affiliated channels equally, or justify to the FCC why that unequal treatment is not based on affiliation.

He also took aim at Comcast's pledges of adding 10 nonaffiliated networks, saying that the nonbinding commitments did not prevent Comcast from giving those new nets minimal distribution on narrowly penetrated tiers with reduced license fees or not fee at all, while charging a premium for it.

Brian Lawler of Scripps, who heads the NBC affiliate association, outlined the commitments Comcast made to them, but emphasized that the FCC would need to make them binding conditions. Those include pledges not to migrate must-have sports from broadcast to cable, keeping retrans and affiliation negotiations seperate, and not bypassing stations with a direct feed of network programming to cable operators.

He reiterated that with those conditions set in regulatory stone, his stations would support the deal.
At least one panelist did not come with conditions in hand or a quiver full of criticisms. 

James Speta, a professor at Northwestern University School of Law, which was hosting the event, said he thought that despite the mergers size, he did not think the FCC needed to rewrite communications law to review it, saying it should be a pretty straightforward analysis dealt with through an antitrust review, and that some of the larger issues about access to programming and carriage could, and should be dealt with by the FCC in general proceedings, rather than using the deal as the vehicle. 

He called the proposed Comcast/NBCU joint venture an "appropriate and interesting response to a marketplace in complete turmoil." He pointed to some of the possible upsides of the merger, including for online content delivery. The company might have less problems lining up legacy rights to content. He also said that if the combination of programming services results in more attractive bundles to advertisers, that is a benefit, even if it forces competitors to find news ways to compete.