Conditions needed on Comcast-NBCU deal: Rep. Waxman

By Jasmin Melvin

WASHINGTON (BestGrowthStock) – Cable subscribers face higher costs, degraded service and fewer choices if U.S. regulators do not impose conditions on Comcast Corp’s bid to take control of NBC Universal, a key Democrat said on Tuesday in a letter to the top telecom regulator.

Regulators from the Department of Justice and the Federal Communications Commission are reviewing the proposed merger that would create a $30 billion combined broadcast, cable, movie studio and theme parks business.

Representative Henry Waxman, head of the House Energy and Commerce Committee, sent a letter to FCC Chairman Julius Genachowski on Tuesday, urging him to impose conditions on the Comcast-NBCU merger that “protect consumers and promote competition.”

Conditions he would like to see include ensuring access to programing and channels owned by Comcast-NBCU for competing program distributors, and protection against unreasonable fees for smaller companies that lack market power.

Local NBC networks with popular shows such as “The Office” and “Parenthood” as well as leading networks like USA, Bravo and MSNBC are among the programing Comcast would own under the transaction.

“Moreover, the FCC should ensure that it puts in place a process to resolve negotiating impasses concerning program access without harming consumers,” Waxman said in the letter.

Retransmission disputes caught legislators’ attention last month after Cablevision Systems Corp failed to reach a timely programing deal with News Corp for Fox programing.

As a result, more than 3 million New York area homes saw a 15-day blackout of local Fox news, the opening of the World Series baseball championship and popular shows like “House,” “Glee” and “The Simpsons.”

Waxman also called on the FCC to prevent Comcast from blocking its broadband subscribers from viewing online content that competes with Comcast’s programing, or providing its video content at a higher quality than competitors’ video services.

Waxman said he would like to see the FCC’s review completed by the end of the year.

An FCC spokeswoman declined to comment on the likelihood of a vote on the merger this year.

But the agency could approve the merger before the year ends if Comcast voluntarily accepts any negotiated conditions the FCC proposes.

Comcast applauded Waxman’s efforts to bring the review to a conclusion.

“This deal will bring significant benefits for consumers, independent programmers, and diversity groups, and the sooner approvals are concluded, the sooner these benefits will be seen in the marketplace,” according to a statement released by the company.

Waxman also said the FCC should protect competing news, sports and entertainment programmers from discrimination in channel placement and tiering, and that opportunities for independent programmers should be strengthened.

Comcast said it is still working with regulators on the concerns Waxman posed.

CABLE COMPANIES ALSO LOBBY FCC

American Cable Association (ACA) company executives are meeting with the FCC and lawmakers this week, pushing for regulatory restraints that they say will mitigate spikes in consumers’ cable bills.

Without clear safeguards against anti-competitive behavior, smaller pay TV providers worry that Comcast could withhold “must have” programing or charge enormous rates that will trickle to consumers, members of ACA told reporters on a call earlier Tuesday.

“When this merger occurs, the cross ownership of the cable and broadcast and full suite of national networks that they’re going to own, will be on a scale that we’ve never seen before in this country,” said Colleen Abdoulah, chief executive of WOW! Internet, Cable and Phone based in Englewood, Colorado.

“If we aren’t given the distribution rights for the products that they carry and own, it’s difficult for us to be competitive,” said Abdoulah, whose company competes directly with Comcast in Illinois and Michigan.

“Where do our customers then go? To them, to our competitor Comcast,” she added.

Small and independent pay TV operators want to see a clear market-based rate assessed for programing fees that serves as a cap for what Comcast can charge them for its content.

Without this condition, ACA President Matthew Polka said TV providers will face $2.6 billion in higher programing costs over nine years that will drive consumer rates up.

“We’re not trying to delay the deal. We’re trying to ensure that conditions are imposed that address the concerns of smaller independent operators and our customers,” Polka said.

(Reporting by Jasmin Melvin; Editing by Richard Chang)

Conditions needed on Comcast-NBCU deal: Rep. Waxman