FCC Hears from Comcast-NBC Critics in Chicago

The Federal Communications Commission examined the proposed merger of Comcast and NBCU at a forum in Chicago on July 13. The event was chaired by FCC Commissioner Michael Copps who focused his comments on network neutrality and his view that rules must to be in place to rein in network owners' control over Internet traffic. "I cannot, I will not, accept half-hearted pledges of fairness from industry when the future of the Web is at stake," he said. "And right now, the assurances and conditions we have received on this Comcast-NBCU proposal do not pass the red-face test." Commissioner Copps spelled out a scenario in which network providers have inappropriate power over the content that consumers access, a particular concern now that the country's largest Internet service provider is acquiring a major content company. "Broadband and the Internet must not become the province of gatekeepers and toll booth collectors," he said.

Most panelists expressed serious concern, if not outright objection, to the proposed $30 billion merger. Critics say they worry that the merger will give Comcast a stranglehold on the industry that would result in less competition and less diversity in media ownership. Comcast competitors say they fear that if the companies merge they will be denied fair and equal access to the broadband needed to deliver their product.

Tyrone Brown, former FCC commissioner and president of Media Access Project, gave Comcast/NBCU props as a "marvel of enterprise," that had become successful through courage, vision and toughness, something he said "I truly, truly admire." Brown said he was impressed, make that "very impressed" with Comcast and NBCU's commitments to advance minority participation in the programming and operations of the companies. He said that if they were made enforceable conditions of the deal, they would be "clear plusses." He went as far to say that in a close call, they would make him "sympathetic" to the merger. But he said with the play for NBCU, they "are going a couple of bridges too far." He said that the combination of assets, particularly where Comcast owned systems and NBC owned stations, it would have the "market-moving" power that it would deploy to the detriment of competing MVPDs and the viewing public. Brown said he was also speaking as a sometime minority entrepreneur in the communications business. He said the "assured adverse impact" on the marketplace of ideas outweighed any "less certain" benefits from Comcast's diversity commitments.

Free Press, among the loudest critics of the deal, said it doubts the ability of government to institute meaningful conditions. "With this deal, the anticompetitive incentives would be part of the DNA of the merged company making conditions with a shelf life about as helpful as putting a Band-Aid on a broken leg," Free Press President and CEO Josh Silver said.

Susan Crawford writes that she often asks why Comcast is pursuing the merger. " The answer I get is not focused on synergies or efficiencies or even shareholder contentment. The answer is that the people with the voting power to steer Comcast into the future want to avoid commoditization of the company's pipes. Future growth for Comcast, already the country's leading broadband provider, will come from having the most subscribers to the fastest and most valued pipe. To stay with the pipe metaphor for the moment, Comcast, the country's leading pay-TV provider providing cable television service to a quarter of all US subscribers, does not want to be operating a dumb pipe that is incapable of monetizing the water that flows through it. Comcast would like, instead, a pipe that is capable of controlling, tiering, and prioritizing online content, just as a cable distributor does. The leadership of the company believes that increased participation in content will delay the day when that pipe is just a pipe."