It's Too Soon to Unleash Comcast
Just seven years after the $30 billion mega-merger between Comcast and NBCUniversal, the behemoth company has been freed from the temporary rules the Federal Communications Commission imposed to prevent it from discriminating against its competitors. Whether you’re a TV consumer, another cable company or a content provider, there’s good reason to be concerned.
During our respective tenures in Congress and at the FCC, we have reviewed many major mergers. In every case, three questions need to be asked: How will consumers be affected? What will this do to competition in the industry? What will it mean for small businesses?
If there are potential problems, the FCC routinely imposes conditions meant to protect the marketplace.
In the Comcast-NBCU deal, such conditions were clearly needed. The merger of the largest pay-TV and broadband provider and a major producer of content would create a company with the power to dominate video programming and content distribution. Federal regulators ultimately approved the deal with more than 150 conditions.
Among the most important, Comcast-NBCU was required to abide by the FCC’s 2010 net neutrality rules, it was barred from discriminating against competitors, and it had to provide affordable stand-alone broadband not bundled with other Comcast services.
In spite of these safeguards, over the past seven years, Comcast-NBCU has found ways to leverage its assets in ways that harm consumers and competition, and some of these moves have violated the FCC's conditions. Just 17 months after the merger, the FCC took enforcement action against Comcast for failing to provide consumers with stand-alone, affordable broadband internet service. That same year, the FCC stepped in to prevent the company from discriminating against rival Bloomberg Television.
This past October, the American Cable Association, a group of small and medium-sized cable providers, complained to the FCC that Comcast-NBCU was preventing rivals of its regional sports networks from offering their customers a basic broadcast tier at fair prices. And in December, further complaints were lodged by RCN, a regional cable, telephone and internet provider that directly competes with Comcast in many markets.
It is true that the video marketplace has seen transformative changes since 2011. Consumers now can choose from a growing list of online streaming services and virtual pay-TV providers, including Netflix, Hulu, Amazon Prime Video, kweliTV and Sling TV. But in this landscape, Comcast can give its own video service an unfair advantage by withholding from the other services NBC’s broadcast television stations or Comcast’s regional sports networks.
For the majority of Americans who still get their video from pay-TV providers, and for the growing number who rely on an online video distributor, the expiration of the merger conditions brings a less competitive marketplace.
We are not the only ones who are concerned. Last November, the Justice Department challenged AT&T’s merger with Time Warner based on the same potential for anticompetitive behavior that led the FCC to impose conditions on Comcast-NBCU. AT&T’s ownership of popular Time Warner programming could harm existing rivals and discourage future competitors from entering the market. The recent repeal of net neutrality protections makes the danger all the more urgent.
The FCC should extend the Comcast-NBCU merger conditions, or impose new rules suited to the present marketplace. At a minimum, the agency must strengthen the program access rule, a regulation established by Congress to prevent unfair practices by cable operators that own programming – companies such as Comcast-NBCU or AT&T-Time Warner.
It would also be appropriate for the Justice Department to investigate the anticompetitive threat consumers will face if Comcast-NBCU is allowed operate without basic rules of the road. But Americans should be able to count on the FCC to ensure that competition flourishes.
To contact the editor responsible for this story:
Mary Duenwald at firstname.lastname@example.org