Comcast/NBCU deal critics say viewers will pay more

* Economist: Calculation of the harms is ‘conservative’

* Comcast says study is ‘flawed’

WASHINGTON, Nov 8 (BestGrowthStock) – Cable giant Comcast’s deal to
take over NBC Universal will cost consumers $2.4 billion in
higher television bills over nine years, according to a study
commissioned by the American Cable Association, which
represents small and medium-sized cable companies.

Comcast (CMCSA.O: ), the top U.S. cable provider, is seeking
a controlling stake in General Electric Co’s (GE.N: ) NBC
Universal. The proposed $30 billion joint venture has caused an
uproar with consumer groups, which warn that the deal would
result in higher prices for consumers.

William Rogerson, a former chief economist of the Federal
Communications Commission, said the deal would lead to $2.4
billion in higher fees to consumers over the next nine years
unless the commission and the Justice Department, which are
assessing the merger, impose conditions.

Rogerson said he found additional costs to the consumer
would total $2.6 billion, slightly offset by $200 million in
benefits. “I view my calculation of the harms to be a
relatively conservative figure,” he added.

Comcast spokeswoman Sena Fitzmaurice, however, dismissed
the report as a “flawed economic analysis.”

“The issues raised in the report have been examined by the
commission in three previous transactions and in each case (it)
rejected imposition of a condition on national cable networks,”
she said in an email.

One condition that the American Cable Association is
pushing would require arbitration to settle disputes for
programming deals if a large cable operator is involved. It
gives a formula to resolve disputes involving smaller
operators, since arbitration is extremely expensive and can
take years.

Senator Herb Kohl, who chairs an antitrust, competition
policy and consumer rights subcommittee, has pressed for
approval of the deal only if Comcast’s competitors are assured
access to NBC Universal’s content and if there is support for
independent programming.

Kohl also wants Comcast to be required to divest the 32
percent stake in online video site Hulu.com if it wins
approval.

Hulu is considered the digital jewel of the transaction.
Having a stake in Hulu would help Comcast sidestep a big
concern for cable companies, namely that users could start
cutting subscriptions if they could see their favorite shows
free online.
(Reporting by Diane Bartz; Editing by Lisa Von Ahn)

Comcast/NBCU deal critics say viewers will pay more