A key lawmaker is urging the FCC and the Justice Department to impose major conditions on Comcast’s proposed union with NBC Universal, including steps to limit the new entity from favoring its content on its programming platforms and even a requirement that they divest the Peacock’s stake in Hulu.
Sen. Herb Kohl (D-Wis.), the chairman of the Senate Antitrust, Competition Policy and Consumer Rights Subcommittee, that the pact “has the potential for serious anti-competitive and anti-consumer effects.” He said his concerns were chiefly with the ability of other cable and satellite providers to gain access to NBC U content, the opportunity for independent programmers to obtain carriage on Comcast platforms, and the potential of the new company to freeze out non-affiliated Web video providers in favor of its own Internet distribution model.
Kohl’s list of 11 recommended conditions to the merger were spelled out in a letter to FCC chairman Julius Genachowski and Christine Varney, who is in charge of the Antitrust Division at the Justice Department.
Some of the more stringent conditions Kohl recommends involve Internet video. He’s calling for regulators to require that Comcast make its programming and channels, including NBC’s properties, available to competitors for Internet distribution on “reasonable and non-discriminatory terms.” Comcast is in the midst of rolling out its Fancast Xfinity broadband service, in which its cable subscribers have access to cable programming online, and such a condition could have an impact on its business model.
Moreover, Kohl is concerned with the new company’s influence over Hulu, in which NBC U has a 32% stake, and calls for it to be divested within a year of the acquisition. And he calls for insuring that NBC content be available on the Internet without being a cable subscriber.
Comcast issued a statement in response to the letter: “This partnership is pro-competitive, pro-consumer and in the public interest. Together Comcast and NBCU will enhance the entertainment experience through bold innovation and expanding consumer choice. We expect a thorough and expeditious regulatory review and that any conditions not unduly burden either Comcast or NBCU’s businesses.”
As the pact works its way through the review process, the lobbying effort among those for and against has gotten more intense.
Earlier this week, California Gov. Arnold Schwarzenegger, Pennsylvania Gov. Ed Rendell and New York Gov. David Paterson sent a joint letter in support to the FCC, urging a expeditious process and that the regulatory agencies “avoid delaying forward progress or imposing extraneous conditions.”
Comcast has long had a strong presence in Washington, and ties to both parties. Among media and entertainment firms, Comcast and its employees make up the largest pool of contributions to federal candidates so far this cycle, according to the Center for Responsive Politics. On Wednesday, the Investigative Reporting Workshop reported that Comcast and General Electric have hired more than four dozen former government workers to lobby for the deal.
Among Kohl’s other recommendations are:
nMaking Comcast and NBC programming and channels available to other cable and satellite providers on “reasonable and nondiscriminatory terms.” Also, Comcast could not discriminate against cable channels seeking carriage on their cable systems in favor of its own programming or that of NBC.
nEnsuring that Comcast and NBC agree to “binding commercial arbitration” over restransmission fees for NBC stations on cable providers. Comcast also would be required to allow the channels to continue to be carried while the dispute is being worked out.