Disputes Remain in Comcast/NBCU Merger

Published May 31, 2016

Comcast and NBCU executives met with Federal Communications Commission officials to discuss applying online distribution conditions to the proposed joint venture between the cable giant and the broadcast content provider.

The November meeting conducted between representatives from the prospective merging companies, FCC Chief of Staff Edward Lazarus, Media Bureau Chief Bill Lake, and other top officials focused on whether online NBCU content will be accessible to Hulu and other Web sites should the merger actually transpire. The FCC has claimed it will render its decision this month.

Opponents of the merger include Washington, DC, think tank Public Knowledge, which filed a petition with the FCC to deny the Comcast-NBCU merger application. Their complaint alleges: “The proposed merger of NBC Universal (NBCU) and Comcast presents potential harms not just to the competitive media landscape, but also to the public interest in the diversity of media voices, technological advancement, and promotion of the public interest, convenience, and necessity.”

‘No Free Content’

However, Steven Titch, a policy analyst at the Reason Foundation, disagrees with Public Knowledge’s assertions: “Contrary to what the FCC might believe, there is no such thing as free content. In our market economy, entertainment is supported directly through consumer dollars or through advertising, or a combination of both.”

Titch continued: “The decades-old broadcast model has shown that advertising revenues alone are strong enough to support programming delivery because broadcasters can deliver audiences numbering in the millions.”

According to Titch, the difference between traditional broadcast and Web-based entertainment is the latter is comprised of “audiences fragmented and difficult to reliably measure.” To Titch, this “presents a new ad revenue puzzle that everyone from small entrepreneurs to the largest media companies is trying to solve.”

‘Narrow View of Online Ecosystem’
While allowing oneĀ  way content providers such as NBCU might enhance revenues could include “leveraging the ability to deliver content via cable and the Web,” Titch stated: “Nonetheless, we are bound to see some experimentation and short-term disruption.”

The potential merger of Comcast and NBCU doesn’t necessarily ensure the former’s dominance in providing content to consumers in a highly competitive industry, said Titch. “It’s far from a sure thing that Comcast’s and NBCU’s success in cable, broadcasting, and movie and TV production will give it any advantage on the Web. Suddenly it will be competing for ad dollars with the likes of Google, Hulu, Facebook, and Twitter, companies that few see as vulnerable,” said Titch.

“The FCC, however, is viewing the ecosystem for online content delivery much too narrowly and seems bent on forcing a merged Comcast-NBCU to limit itself to the broadcast revenue model on the Web, something that’s probably not going to work,” Titch explained.

“In the end, this could only be bad for consumers, Web-based entertainment, and on-line competition,” he said.

Tabassum Rahmani
([email protected]) writes from Dublin, California.