Opinion: Washington to Comcast: You may now start trying to digest NBC-Universal
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With the conditional blessings of the Federal Communications Commission and the Justice Department, cable giant Comcast will now combine its programming assets with General Electric’s NBC-Universal in a joint venture that Comcast will control. The conditions were onerous enough to draw complaints from the FCC’s two Republican members, but not onerous enough to satisfy liberal commissioner Michael J. Copps. In other words, regulatory bull’s-eye!
As The Times’ editorial board observed last month, the challenge for Washington was to preserve competition by making sure NBC-Universal’s studio and networks behaved the same way under Comcast’s control that they would have behaved under GE’s. The conditions on the merger appear to do that, denying Comcast the ability to withhold content from competitors (most notably online ones) or favor its own programming on its own distribution systems.
Not being an antitrust lawyer, I have to wonder what’s the point of a distribution company buying content if it can’t make that content more available to its own customers and less available to its competitors’. But the restrictions on Comcast are consistent with the treatment of cable operators generally. Congress has long required cable companies to share their programming with rivals, dating back to the days when lawmakers were trying to nurture the fledgling small-dish satellite TV business.
What’s new here is the attention the FCC and the Justice Department paid to online video distributors, or OVDs. Two requirements stand out: Comcast must offer ‘legitimate OVDs the same programming packages on the same terms and conditions’ available to conventional pay-TV services, and it must make ‘comparable programming’ available on ‘economically comparable’ terms to any OVD that has licensed programming from one of Comcast-NBCU’s rivals.
In other words, Comcast will have to treat an over-the-top player such as Sezmi the same way it does, say, Time Warner Cable. And if Apple persuades Disney to offer its programming through an Apple TV set-top box, Comcast will have to follow suit.
But wait, there’s more! Comcast won’t be able to enter agreements that ‘unreasonably’ restrict the availability online of any video programming -- a condition that may force the company to make its Xfinity service available to anyone online willing to pay for it, rather than offering it solely to its cable subscribers as a way to preserve loyalty. And it’s forbidden to exercise corporate control over Hulu, the online video service that NBC-Universal helped to create.
(The Justice Department also set a new standard for prescriptiveness in the area of Net neutrality, requiring Comcast to continue to offer download speeds of at least 12 Mbps in upgraded markets. That provision guards against Comcast starving its conventional broadband offerings in favor of ‘managed’ Internet services that prioritize traffic from the company’s partners.)
In sum, the conditions limit Comcast’s ability to withhold programming, reducing its negotiating leverage as it deals with other video distributors, including online rivals. That’s not to say that the combined company will have less leverage than Comcast and NBC-Universal had separately; Comcast is still the country’s largest cable operator and a top supplier of broadband Internet connections. But the conditions push Comcast to seek profits online by maximizing distribution rather than trying to make its shows scarce.
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-- Jon Healey
