Comcast-NBCU to Cost Consumers

That consumer cable bills will continue to climb is a sure bet. If regulators approve Comcast’s control of NBC Universal, it will cost consumers even more — $2.4 billion more over the next nine years. That’s according to a study released today by the American Cable Association, which represents 900 small and medium-size independent cable companies.

ACA has advocated that regulators put conditions on the $30 billion transaction.

Dr. William Rogerson, a professor of economics at Northwestern University, who served as the Federal Communications Commission’s chief economist from 1998-99, conducted the research.

Rogerson found that if cleared by regulators, Comcast-NBCU could raise programming fees significantly above levels the two would be able to command if they were separate and independent companies. According to Rogerson, the cost to consumers post-transaction is 10 times greater than the quantifiable consumer benefit of $204 million claimed by Comcast and NBCU.

In breaking down the programming costs which would be passed on to consumers, Rogerson found the transaction would cause $1.6 billion in fees charged for NBCU national cable networks, $651.2 million in fees charged for Comcast’s Regional Sports Networks and $355.6 million in fees charged for NBC O&Os.

Consumers in some locations would be hit the hardest where Comcast has a significant cable presence, operated the Regional Sports Network and controls the NBC stations in Philadelphia, Chicago, San Francisco, Washington, D.C., and Hartford, Conn.

“It is clear that the Comcast-NBCU deal will send monthly cable bills higher by billions of dollars over the next decade, underscoring ACA’s view that regulators must protect consumers and competition from a transaction whose benefits are vastly outweighed by its harms. Without meaningful and cost-effective conditions on the Comcast-NBCU transaction, regulators also run the risk of crippling effective competition in the pay-TV distribution market,” said Matthew Polka, president and CEO of the ACA.