NBC-Comcast Merger Not in the Public Interest

Far from meeting FCC's standards, the takeover of NBC by Comcast would create a monolithic media superpower and cause irreparable damage to the American media landscape and society as a whole.
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At a time when a small number of giant media corporations already control what the American people see, hear, and read, we do not need another conglomerate with more control over the production and distribution of news and other programming. What we need is less concentration of ownership, more diversity, more local ownership, and more viewpoints.

The proposed mega-merger of General Electric's NBC Universal, one of the largest media companies in the country, with Comcast, the largest cable television provider in America, would be a giant step in the wrong direction. The Federal Communications Commission (FCC) should block the deal. That is exactly what thousands of people have said in letters to the FCC, sent through my website in the past few days.

The FCC may sign off on the merger and transfer the license to use the public airwaves only, according to the threshold set by law, if it determines that the arrangement serves "the public interest, convenience, and necessity." Far from meeting that standard, the takeover of NBC by Comcast would create a monolithic media superpower and cause irreparable damage to the American media landscape and society as a whole. Furthermore, it is likely that the merger of these two media giants would precipitate other media mergers and make a very bad situation ever worse.

Citizens in a democracy need diverse sources of news and information. The sale of NBC to Comcast would lead to less local news, fewer points of view, and less competition for viewers and advertising, not just in Comcast's network but throughout the country.

There are other reasons to oppose combination of NBC and Comcast. Chief among them is that it would drive up consumer costs. One study by a former chief economist for the FCC found that consumers would pay $2.4 billion more in fees if the merger were completed. As the country struggles to recover from the worst economic crisis since the Great Depression, it is unconscionable to ask millions of consumers to spend more while receiving virtually no tangible benefits. At least in my view, the "public interest, convenience, and necessity" would not be served by a regressive transfer of $2.4 billion from ordinary citizens to one of the largest and wealthiest corporate entities in the United States.

The deal also would have a negative impact on the development of new programs. Comcast already is the nation's largest distributor of video services. NBC Universal is one of the nation's largest producers of video content. The merger would create what economists call vertical integration and put other content providers seeking access to Comcast's customers at a distinct competitive disadvantage.

Comcast, of course, has dismissed these concerns. The cable operator, which has a history of jacking up rates for even the most basic services, would have us believe that consumers somehow will benefit from the merger with lower prices. Yeah, right. Comcast contends that combining the largest video distributor and one of the largest producers of video content into a single media entity would increase diversity of programming. The company also defies logic by arguing that centralizing ownership would by some mysterious process enhance local control. These non-sequiturs are nonsense.

In the past few days, we've seen ominous signs of what's to come if the FCC okays the merger. Even in the midst of two extensive federal review processes, at a time when you would think Comcast would be acting with the utmost caution, the company has continued to throw its weight around to the detriment of its competitors.

Comcast reportedly told a Netflix affiliate that it will not stream Netflix video to Comcast subscribers without substantial new fees. Why would Comcast do such a thing? Why wouldn't it want to continue offering its customers Netflix? Perhaps because Comcast has its own business streaming video to consumers, a business that directly competes with Netflix.

Then, according to a complaint filed Monday with the FCC, Comcast will not let subscribers buy modems made by Zoom Telephonics until Zoom pays for a battery of expensive tests. Why would Comcast want to deny its subscribers access to Zoom modems? The answer is just as obvious as in the Netflix scenario. Comcast rents modems directly to consumers, thereby competing directly with companies like Zoom. It has every reason to make Zoom modems more expensive or even to drive companies like Zoom out of business.

We shouldn't be surprised. These are the kinds of things that happen when a company like Comcast wears too many hats. The fact that Comcast continues these practices even while it is under scrutiny by the Department of Justice and the FCC, however, should give us pause. We need to recognize that if Comcast is acting like this now; things will be far, far worse if the merger is approved.

Perhaps the reason that Comcast has continued its anticompetitive practices, apparently without fear that they will jeopardize its merger approval, is that Comcast has a keen sense of how Washington works. Campaign contributions from those who work for Comcast doubled this year. In fact, if you can believe it, Comcast donated to three-quarters of the members of the House of Representatives and half of the members of the Senate. Is it a coincidence that so many members of Congress have supported the merger? You be the judge.

Fortunately, the FCC's clear mandate is set by statute. Another media merger that would reduce competition and stifle creativity in TV programming, the cable industry, and on the Internet is clearly not in the public interest.

Given the enormity of the issue, it is remarkable how little attention has been paid to the proposed merger. As the FCC nears the end of its review process, it is the time for the American people to speak out and send a loud and clear message: Stop the merger.

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