Comcast/NBC Merger: CU urges investigation


January 7, 2010

Comcast/NBC Merger: Consumers Union and 25 Groups Send Letter Urging President and Congress to Investigate

WASHINGTON, D.C. – Consumers Union, the nonprofit publisher of Consumer Reports, today joined 22 business, labor, public interest and other consumer groups in a letter expressing grave concern over Comcast’s proposed acquisition of NBC-Universal. In the letter, which was signed by groups ranging from the Parents Television Council to Communications Workers of America, the groups urge President Obama and Congress to investigate the consumer and competitive harms implicated by the mega-merger.
In the letter, the coalition writes:
“We believe that a merger of this size and scope will have a devastating effect on the media marketplace. It will result in less competition, higher consumer costs and fewer content choices. It also will give one company unprecedented control over innovative new media that offer news, information, entertainment and cultural programming through emerging technologies.
Joel Kelsey, policy analyst for Consumers Union, said this proposed merger could have major consequences for consumers: “This merger would combine a major television network and film studio with the nation’s largest cable company and residential broadband provider, which could be a recipe for disaster. This merged giant has great potential to lead to higher cable and broadband rates for consumers, less competition in online video, and less diversity among the programming choices for viewers. There are no clear benefits to consumers from this merger.”
Text of the letter:
Dear President Obama and Members of Congress:
We represent a broad group of industry, labor and public interest organizations that are gravely concerned about Comcast’s proposed acquisition of NBC-Universal. We believe that a merger of this size and scope will have a devastating effect on the media marketplace. It will result in less competition, higher consumer costs and fewer content choices. It also will give one company unprecedented control over innovative new media that offer news, information, entertainment and cultural programming through emerging technologies.
A combined Comcast/NBCU would control a major television network and film studio, the nation’s largest cable company and its largest residential broadband provider. The merged giant would have strong incentives to discriminate against other multi-channel video providers in granting access to its wealth of programming, including all of its broadcast stations and “must-have” national and regional networks that air live or same-day sporting events, as well as the market power to enforce anticompetitive “bundling.” The proposed deal could make it even harder for diverse and independent voices to find an audience, as Comcast would have the incentive to prioritize NBC channels and programs over others. Control of NBCU programming also would give Comcast the opportunity to prioritize its own online video products over those of its competitors – or sharply reduce online video distribution altogether – pushing independent producers out of the picture.
Comcast has proposed to voluntarily agree to a handful of commitments in an attempt to avoid the imposition of more effective, and competitively essential, conditions on this merger. While these “commitments” purport to address concerns about localism and program diversity, and would extend the current (and arguably ineffectual) program access rules to broadcast and HD programming, they are mere window dressing. Moreover, they do not mitigate the competitive danger of the vastly increased vertical integration that would result from a Comcast/NBCU marriage, and they do not address the competitive issues raised by the merged company’s control over online video distribution – an increasingly important platform for television distribution. To prevent a disastrous impact on competition and consumer choice, any approval of the merger must include meaningful conditions that extend well beyond those previously imposed on less significant mergers.
The proposed deal raises the most basic antitrust and public policy issues for an administration that has declared both the importance of media diversity and an intention to be more vigilant against anticompetitive conduct and abuses of market power. We ask that you take a hard look at this merger and take the necessary measures to prevent harm to both consumers and competition.
Signed,
American Cable Association
Center for Media Justice
Common Cause
Communications Workers of America
Concerned Women for America
Consumer Federation of America
Consumers Union
Free Press
Kids First Coalition
Media Action Grassroots Network
Media Access Project
Media and Democracy Coalition
Morality in Media
National Association of Independent Networks
National Consumer League
National Organization for Women
National Telecommunications Cooperative Association
Organization for the Promotion and Advancement of Small Telecommunications Companies
Parents Television Council
Public Knowledge
Satellite Broadcasting and Communications Association
Sports Fans Coalition
U.S. PIRG
Writers Guild of America East
Media Contacts:
David Butler 202-462-6262
Kristina Edmunson, 202-464-6262
Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers