Comcast has now formally responded to Bloomberg's charge that the cable giant is not meeting one of the conditions imposed on it as a result of the NBC Universal merger. In a letter sent Monday, Comcast says it is not violating the condition, which deals with "neighborhooding," and that it does not have to rejigger its cable lineup to place Bloomberg TV in the same grouping of channels as CNBC, which it now controls thanks to the NBCU deal.
In a five-page letter to Bloomberg's legal team, Comcast general counsel Arthur Block says that Bloomberg's claim rests on a faulty definition of what constitutes a news neighborhood.
The dispute over the condition started May 26, when Bloomberg fired off a letter to Comcast notifying the company that it intended to file a formal complaint with the Federal Communications Commission. Bloomberg, which opposed the NBCU deal in the first place, argued that the condition, crafted to prevent Comcast from shutting out competitors to its own news channels such as CNBC, required Comcast to take Bloomberg TV out of the nosebleed section and group it with other news and business news channels.
But in Comcast's letter, the company says it is in compliance with the condition, which it reads as applying only to future actions that it might take after the NBCU transaction. "Their respective channel positions are a result of this preacquisition history, not any discriminatory motive," the letter states.
Second, Comcast argues that four channels consecutively placed together do not constitute a "neighborhood." Comcast points to other distributors—including Verizon, AT&T, Dish Network, and DirecTV—grouping between 10 to 15 news networks together. Using the four-channel definition of a neighborhood, Comcast says, it already has Bloomberg TV in one in Boston, where it is next to CNBC, C-SPAN, C-SPAN2, and The Weather Channel's Weatherscan.
Comcast does offer Bloomberg an olive branch, saying it would be happy to "engage in good faith commercial discussions with Bloomberg regarding this matter."
Bloomberg is sticking to its guns, charging that Comcast is ignoring the FCC's direction. "The Commission told Comcast that it must include independent news channels, such as Bloomberg TV, in any news neighborhood that it carries 'now or in the future.' Rather than delays and obfuscations, Comcast should respect the public interest and implement the FCC's order immediately," Bloomberg said in a statement.