Comcast, the nation’s largest cable company, announced recently that it had reached an agreement to purchase a majority stake in NBC Universal from General Electric. The deal values NBC at $30 billion and creates a joint-venture media behemoth that is bad for consumers.
Under the terms of the agreement, Comcast will control not only the NBC broadcast network, which is currently fourth place in ratings amidst a deteriorating broadcast TV market, but more importantly, it will have NBC’s lucrative cable operations under its belt as well. These include CNBC, MSNBC, USA, Bravo, and SyFy, among others. (Broadcast networks are suffering from steep advertising losses, their only source of income, while cable networks make money from both advertising and the monthly subscription fee cable companies charge households).
The extent to which this consolidation will reduce competition is unimaginable. Comcast will own both sides of the court: content creation as well as content distribution. And it will be in a position where exercising anti-competitive actions greatly helps the bottom line.
It could begin charging competing cable companies more to distribute NBC shows, a cost that will likely be passed on to the public. Comcast’s sports channel, Versus, would gain all of NBC’s programming, including rights to NFL games and the 2012 Olympics, and could easily ruin ESPN by denying SportsCenter replay privileges to those events.
Then there’s the matter of Hulu.Hulu.com, a site that offers advertising-supported streaming of TV shows and movies, is partly owned by NBC Universal. There have been talks that Hulu will start charging for content soon, and under Comcast, that is even more likely.
Comcast also provides internet and telephone service to millions of people, and thus the deal is a major setback for net neutrality (the principle that the Internet should remain free and open, and that content on the web should not be discriminated by internet service providers). Last year, Comcast was found guilty of deep-packet inspection, or closely monitoring users’ online activities, and then selectively throttling down connections from services it didn’t like, such as peer-to-peer file sharing. The story went like this: if Comcast provides cable television and internet to customers (and charges for both), why should they allow people to use the internet service to obtain television shows online? Comcast wants everyone to buy the television content from them, not get it from file-sharing sites. Now, with all of NBC’s shows behind them, Comcast has even more incentive to restrict this access. The same logic applies to telephone service–let’s just say that Comcast is not particularly fond of Skype.
It is important to note here that this merger is still subject to regulatory approval from the Federal Communications Commission, which will hopefully see the potentially harmful implications of this deal and move to prevent it from completing.
