Bloomberg to Make Good on Threat, File Comcast Complaint with FCC

By Alex Weprin 

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Bloomberg TV is expected to make good on the threat it levied last month against cable operator Comcast. As part of its deal to acquire NBCUniversal, Comcast agreed to abide by a “neighborhooding”clause, which says that if it groups channels together (i.r. kids channels or news channels) then it can not discriminate on those channels based on who owns them.

The clause is meant to prevent Comcast from favoring channels it now owns, such as E! or CNBC. Bloomberg argues that in many markets, it is placed far higher up on the dial than its competitors, and that this violates the clause.

Update: Bloomberg’s complaint to the FCC is embedded after the jump. Update 2: Comcast’s response is also after the jump.

The Wall St Journal (Sub. Required) has more:

An example of what Bloomberg dislikes: In Washington, D.C., CNN Headline News, CNN, Fox News, MSNBC and CNBC occupy channels 35-39. Bloomberg TV is channel 103.

Since regulators blessed the deal in January, Bloomberg has sought to get Comcast to rearrange its line-ups as it believes the order requires, beginning with a call in early March from Bloomberg president and chief executive Dan Doctoroff to NBCU chief executive Steve Burke, according to a draft of the complaint.

Comcast’s lawyers have responded in conversations and letters arguing that the FCC rule applies only to “news neighborhoods” that Comcast might create in the future, and that, except in a few experimental cases, it doesn’t “neighborhood” news channels.

Comcast released this statement on the matter:

“The FCC Order in the Comcast NBCUniversal transaction does not require Comcast to ‘neighborhood’ Bloomberg. The FCC clearly stated that ‘we decline to adopt a requirement that Comcast affirmatively undertake neighborhooding’ and that the neighborhooding condition ‘would only take effect if Comcast-NBCU undertook to neighborhood its news or business news channels.’

The so-called ‘neighborhooding’ condition in the FCC’s Comcast NBCUniversal transaction Order does not support Bloomberg TV’s request today. Comcast does not, and since the transaction has not, ‘neighborhooded’ channels on our systems.

If Comcast were forced to do what Bloomberg is asking the government to mandate, millions of customers would be subject to disruption and confusion required by massive channel realignments across the country all to benefit an already thriving $30 billion media company. The FCC carefully crafted its moderate, forward looking condition precisely to avoid this type of upheaval.”

Bloomberg Complaint Submitted to FCC June 13, 2011