Why the Comcast-NBCU Acquisition is Possible: A Glance at Recent History

Many analysts have identified the proposed acquisition between Comcast and NBC Universal (NBCU) as the first example of vertical integration in the communications marketplace of the Digital Age. Few have pointed out, however, that the regulatory framework that allows for such an unprecedented combination of assets is also a 21st century phenomenon. Less than a decade ago, this combination would have been against Federal Communications Commission (FCC) regulations - indeed, it would have been merely a business executive's dream. What makes this acquisition attempt possible today is the drastic, systematic deregulation in media policy that has taken place over the last 20 years. If allowed to go through, the Comcast-NBCU deal would result in unprecedented consolidation in media. For the first time, it would allow a single company to control both the cable system and a broadcast station in a dozen of the largest U.S. media markets. Folks living in Boston, Philadelphia, Chicago, Washington, San Francisco, and other major cities would receive their household cable hookup from the same source that runs their local NBC broadcast station. As a result, Comcast would be more tempted to discriminate against its competitors online by charging higher fees to rival cable providers for access to NBC content, or by blocking the access of other programmers to its network, as it has attempted to do in the past. Comcast customers could also be left with higher monthly cable bills. No company in history has enjoyed such extensive powers of control over how the public shares and receives information, and how that information is produced. Why is a deal like this being considered now? Not as a result of pure coincidence. Before 2002, federal regulations prohibited exactly such business arrangements.