The first congressional hearings on the proposed transaction between Comcast and NBC Universal held today before a House Energy and Commerce subcommittee raised more questions than answers about how the $30 billion transaction would impact consumers and competition in the media business.
Strapped for time and interrupted by critical votes on the House floor, the members of the Subcommittee on Communications, Technology and the Internet did more talking than the panelists, which probably suited Brian Roberts, CEO of Comcast, and Jeff Zucker, chief exec at NBCU, just fine.
Proposed two months ago, regulatory review of the deal between the nation’s largest cable company and the fourth-largest media concern is expected to take the better part of a year. The deal must secure the blessings of both the Federal Communications Commission and the Department of Justice.
Since the deal was announced, public interest groups have been working overtime in opposition, claiming the merger would stifle competition and harm consumers by limiting programming choice and raising prices.
Of course, Roberts and Zucker defended the proposed transaction.
“It will preserve broadcast television and accelerate an amazing digital future for consumers. This joint venture will be good for consumers, innovation and competition,” Roberts said. “There is no significant overlap in assets, it’s primarily a vertical deal, so there are fewer antitrust concerns. That’s why Wall Street does not love this deal but Washington can.”
Zucker, who said he was worried about the future of broadcast TV prior to the deal, painted a picture of Comcast as the white knight that will rescue the struggling business as it confronts what he called a “media free-for-all.” “[This deal] gives me greater comfort about the future of broadcasting,” he said.
Although Comcast and NBCU have made a number of commitments to preserve free over-the-air broadcasting and the network-affiliate relationship, Michael Fiorile, chair of the NBC affiliates board and president, chief operating officer of Dispatch Printing Co., wanted more than just assurances. “The company’s intent is to grow our partnership. Ownership [of the NBC O&O stations] will provide Comcast with a direct stake. It’s a positive start, but it’s just a start. We want to agree on clear and enforceable conditions,” he said.
Assurances also weren’t enough for Colleen Abdoulah, president and CEO of WOW!, a small cable company serving 1 million homes that competes with Comcast. “The combined company will have strong incentives to increase our costs,” she said. “I’m not here to whine. I ask for a remedy structure. The current retransmission consent procedures and outside arbitration don’t help us. They are time consuming and don’t ensure continued carriage while in negotiation. Regulators must impose different and better remedies.”
For Mark Cooper, the director of research for the Consumer Federation of America, the deal is nothing less than the end of media and video competition as we know it, especially in local markets. “These two companies compete for audiences and advertisers in a dozen of the nation’s largest markets. The two companies compete in video programming, news and sports. They compete in cyberspace,” he said. “My great fear is that this would create a merger wave.”
Have no fear, said Adam Thierer, president of the Progress and Freedom Foundation. “This deal won’t have the detrimental impact some critics have feared. Many mergers often die of natural causes over time,” he said, referring to AOL Time Warner. “We won’t know what works unless we allow it. Regulatory flexibility is crucial so we can figure out what works and what doesn’t.”
See also: “Comcast More Than Doubles Q4 Profit”