NBCU's Cotton Stands By 'Affiliated Services' Position On AOL/Time Warner Union

A top NBC Universal executive stands by the company's comments on the AOL/Time Warner merger back in 2000 that the distribution side of the deal "should not advantage affiliated services," and says that issue is covered in a public-interest statement that accompanied the proposed Comcast/NBCU merger.

That is according to NBC executive vice president and general counsel Rick Cotton. He was responding to the American Cable Association's circulation of a copy of the company's AOL/Time Warner comments and the suggestion it was flip-flopping now that it had a deal in the works, a point it wanted to spotlight as NBC executives talk to regulators about the joint venture.

Those 2000 NBC comments, co-authored by Cotton, raised NBC concerns about the merged company's potential to discriminate against competing Internet content providers. "NBC is concerned that the fusion of Time Warner's cable distribution network and video and Internet content with AOL's Internet service system and content has the potential to affect materially competition in the Internet marketplace and especially in the emerging broadband marketplace," NBC said in its comments. "Aided by the "smart" technology in state-of-the-art routers and digital set-top boxes, the merged entity will have both the economic incentive and the ability to secure substantial competitive advantage by discriminating against unaffiliated content providers in the converged broadband marketplace encompassing both interactive television and the Internet."

NBC back in 2000 said that if the commission did decide to approve the merger, it should include a "meaningful, enforceable commitment by AOL/Time Warner to provide nondiscriminatory access - in terms of carriage, features, capabilities and services - - to unaffiliated content providers seeking to make either video programming or any other Internet-based content available on AOL/Time Warner's Internet platforms, including its broadband platform."

"ACA hopes that Mr. Cotton and others at the NBCU organization have not completely forgotten their principled views about the harms of media consolidation and vertical integration," said ACA president Matt Polka in circulating the document,"and that Mr. Cotton would use his influence within his company to convince the new Comcast-NBCU leadership to scrap immediately the meaningless initial proposed concessions and replace them with more substantive commitments that truly address the concerns of consumers and other buyers of its services, particularly small cable operators."

The Comcast/NBCU public-interest statement issued included commitments to extend the FCC's program access rules to retransmission-consent and setting aside some digital channels for independent content.

"First of all, we didn't oppose the [AOL/Time Warner] merger," Cotton told Multichannel News. "What we said was that the distribution side of the merged company should not advantage affiliated services. And we haven't said anything inconsistent with that from then until now."

"The view that a distributor should not advantage its affilated services is in fact addressed in the day one commitments [the public-interest statemet]. And there is nothing inconsistent in terms of the specific [AOL/Time Warner] commentary in 2000 with what the day one commitments address."

He did say those issues "may get further addressed in the proceeding," but added that "there is certainly nothing inconsistent and nothing forgotten about that very specific set of comments."

"I think the main significance of the AOL/Time Warner merger," said Cotton, "which is actually something we continue to point to, is that in the competitive, rapidly changing media marketplace driven by new digital technology, competition is not only alive and well, but it is so imbedded in all parts of the landscape that it is going to take everybody's best efforts simply to remain a strong competitor."

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.