Too Big to Block? Why Obama Must Stop the Comcast-NBC Merger

Now that Vivendi and General Electric have struck a deal, cable giant Comcast is expected to to buy a controlling stake in NBC-Universal; marking the biggest proposed media merger in recent memory. Comcast, the largest cable company and the No. 1 residential Internet service provider in the nation, would take over the NBC empire: a television network, Universal Studios, MSNBC, CNBC, USA Network, Telemundo, the Weather Channel, Hulu.com, 27 television stations and a host of other properties.

This train wreck of a deal will hurt all over. It will mean increased costs for cable television service; currently free online NBC content locked behind a pay wall; less opportunity for the distribution of independent media; even fewer choices and less programming diversity. On average, nearly one quarter of all channels offered to cable subscribers will be owned by the bloated Comcast.

News reports about the deal are citing the "conventional wisdom" echoed by industry analysts from Wall Street and Washington: Judicial and agency precedent indicates that the Justice Department and Federal Communications Commission will not be able to stop the merger -- even if they know that the cost to the public interest will be grave. This is the same kind of regulatory precedent that permitted the renegade banking industry to run amok, until the system came crashing down. Our lawmakers should have been reining in these out-of-control corporations long ago. But therein lies the problem: Corporate-friendly judges, appointed by corporate-friendly politicians, elected with contributions from their corporate patrons, have created a body of legal precedent that makes even the most common sense antitrust rulings difficult to impossible.

It was just 18 months ago that candidate Barack Obama said, "I strongly favor diversity of ownership of outlets and protection against the excessive concentration of power in the hands of any one corporation, interest or small group." Five months later, Obama was swept into office promising to bring change to Washington.

If President Obama really wants to change the system that green-lighted the bailout of "too big to fail" banks and would allow the looming crisis of too-big-to-block media mergers, he will have to overhaul federal antitrust laws so that they actually protect the greater good.

Until such change is realized, there are several reasons why current antitrust laws -- albeit weak -- can and should block the Comcast-NBC deal during the review process, which will likely take a year or more:

1. The merger would eliminate the hard bargaining for distribution and content that normally occurs between distributors (like Comcast) and content producers (like NBC). That competitive bargaining will only intensify as more video is distributed over the Internet in the coming years.
2. The Comcast-NBC behemoth would control several distribution platforms -- a major television network, the largest cable company and the largest Internet service provider. The merged company will have strong incentives and the market power to discriminate in granting access to its wealth of programming. It will have the incentive and market power to enforce anticompetitive "bundling" and price-gouge other cable companies, especially smaller cable companies.
3. As the largest cable company and Internet service provider, Comcast will have the motive to move NBC's video content behind a pay wall that will mean higher costs for consumers, and it would stunt the growth of the Internet as an alternative medium for video service. Placing video content behind a pay wall that is only available to Comcast cable customers is a classic example of "anticompetitive bundling." That is, consumers who want Internet access to NBC programming will be forced to buy the bundle of cable and Internet.
4. Perhaps the most dangerous risk of this deal -- and one we have seen many times in years -past - is that it will trigger a "merger wave" throughout the industry as distribution companies and content companies seek to "muscle up" to match the new threat that the vertically integrated Comcast poses. Consumer choice will be restricted and prices will rise. With diminishing competition, the likelihood of similar behavior by other companies grows stronger, as does the threat of collusion among competitors.

The Comcast-NBC deal is black and white: It would create a company with too much market power, and it would further starve Americans of the diversity already missing from our media marketplace. It raises the most basic antitrust issues for an administration that has declared both the importance of media diversity and an intention to be far more vigilant against anticompetitive conduct and abuses of market power.

President Obama, Congress and federal agencies must acknowledge the serious threat that this merger poses and take the necessary measures to prevent harm to competition and consumers. That means putting the American people first and corporate greed second. It means stopping the merger.

 

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Comments

[johnsopinion]

In my city we have a choice--either Comcast or ....... antenna.

Anyway, after I took on Comcast as my internet service provider
we had a storm. My internet connection crashed. I called Tech support.
After walking me through everything I had already tried, I was told
that they couldn't help me. Click. Just hung up. I got my service back
through my own dogged efforts. It only took a week or so.

I already had cable through Comcast and it was working pretty good.
However, of late, say the last 6 months, Comcast has become embroiled
in deals with various other companys that offer TV schedules. Some
times they appear, some times they don't. I guess if, say, YAHOO
doesn't come across with what Comcast wants, then Comcast
withholds the days schedule. Same with MSNBC. Sometimes its
there, sometimes it isn't. Usually it isn't is the new schedule.
Yesterday, there was no schedule of planned programs on the cable
menu through the cable service provided by Comcast! Knowing what
is going to be the storyline of a scheduled program has become a
guessing game with Comcast.
And now they want to bring this haphazard running of a business to
NBC!?!?!?!?!?!?
Comcast knows one thing--how to make money--whether by degrading
tiers of internet service or cutting back on or hiring cheap personnel,
but they don't know what makes a business desirable to its customers.
Good luck America.

[FerrellGummitt]

Does this mean Comcast would fire Olbermann and Matthews then?

Do what we are about to do, dump cable and get DVD's from the library...

[67yrolfe]

Fair and Balanced? The media powers that be really have some of you brainwashed! It would be nice to live in a perfect world where everything is in its place – the good people over here and the bad people over there. But that’s not going to happen. Not everything has to be “fair and balanced”. It’s okay for networks and stations to offer differing views. Being truthful would be nice but that’s gone too. The problem is that too few offer liberal/progressive views. Most programming is either right wing or CNNish, which leans right and that’s all by design. So I’m going to keep asking, where are all the liberal/progressive corporate folks? They do exist. Why aren’t they buying up stations and networks? Why can’t Oprah or someone like her be our liberal Rupert Murdock? Oh, that’s right, how silly of me to forget – Oprah and liberal/progressive’s like her are corporate folks like Murdock!

My late husband was a democratic socialist and atheist who spoke truth to power. He was blacklisted off the air (radio talk) in the late 80’s by so-called liberal groups using the fairness doctrine so don’t believe for one minute that bringing the fairness doctrine back would help.

[FerrellGummitt]

Mam: Murdoch, Rupert Murdoch, not Murdock.

[67yrolfe]

Sorry Ferrell, I used to keep up with all you wiz kids on here. But after my breast cancer diagnosis in October; I’m just trying to get through the treatments and stay involved. But if a misspelled word or two is going to bother you this much; maybe it’s time this 69 year old lady moved on.

[Lex10]

BLOCK!

[Margaretpoa]

I agree that it should be stopped but in the end, I wonder how much difference it will make. The right wing already own all traditional media outlets and that includes NBC. Even though there are a couple of left leaning talking heads on MSNBC, they still spin the news from a right wing perspective. i.e. Everything from the conservative perspective is treated as very serious and they will book a right wing talker first, while the left is treated like a bunch of unwashed hippies who wouldn't know serious if it fell on them.

[Clem2]

I agree with all this. But why isn't the younger generation taking to the streets? They are also the spoiled generation. Everyone just sits there watching big screen TV while Democracy is lost. The fact that education is crap now is no accident, either. A teacher once told me she thought this was a goal of the establishment and I laughed.

I am not laughing now.

[separatingwheatfromchaff]

Sooner or later all these proposed ideas to stop the never ending march of American corporations(which includes healthcare reform)to gouge the public,all end up in the US Senate.Just as we've watched healthcare legislation get bastardized to the point of non existence,so goes every major bill with corporate interests spreading enough money to influence enough votes to steamroll the American people.I don't see our government as representative of the people any longer,unless of course you consider corporations to be people.

As MicheleCA stated earlier, this merger will most likely lead to the end of net neutrality.With no avenue left to expose our bought and paid for political leaders and shaming them into doing the right thing,what's left?

[laertius]

Oh my, this IS truly alarming. In a world of 100s of cable networks and millions of websites, the biggest cable operator is going to corner the market on an old legacy network with an iffy future, and it’s fellow cable networks with an even more iffy future. Never mind that the only way for Comcast to make money out of this is to sell the programming to other distributors (including competitors), as it does with its sports and other networks now. Kudos to Brian Roberts for getting control without paying for the whole company; but the real winners are GE and Vivendi, who found a greater fool with deep pockets! ROFLMAO

[MicheleCA]

It occurs to me this might end net neutrality.

[barrycourage]

On ending Glass-Steagle:

"The Industry’s efforts... [are] a case study in how a well-heeled and well-organized interest group can swiftly prod Congress to move... Nor is it surprising, according to both political science and economic literature, that the interest groups played a vital role in the timing of the 1999 deregulation. Without persistent lobbying by commercial and investment interests it is unlikely that reform would have taken place in this century."

http://thestrangedeathofliberalamerica.com/bill-clinton-glass-steagall-and-the-current-financial-and-mortgage-crisis-part-two-of-an-indepth-investigative-report.html

Diluting The Communications Act of 1934:

"Specific deregulatory moves--some by Congress, others by the FCC--included (a) extending television licenses to five years from three in 1981; (b) expanding the number of television stations any single entity could own grew from seven in 1981 to 12 in 1985 (a situation under consideration for further change in 1995); (c) abolishing guidelines for minimal amounts of non-entertainment programming in 1985; (d) elimination of the Fairness Doctrine in 1987; (e) dropping, in 1985, FCC license guidelines for how much advertising could be carried; (f) leaving technical standards increasingly in the hands of licensees rather than FCC mandates; and (g) deregulation of television's competition (especially cable which went through several regulatory changes in the decade after 1983)."

http://www.museum.tv/eotvsection.php?entrycode=deregulation

Big business trashes legislation born of the Great Depression and now we're in another Great Depression.

Government for the people.

[brt929]

That is a great link. Fanned.

[reflux12]

D@mn the Deal in public as this is creating another "to big to fail" MoneyBeast.

[wheatsavage]

There is no hope for American media. Just turn off your televisions!
If it wasn't for all the idiots watching American Idol and Married with Children, there would be no Fox News!!! The media and our government is controlled by big business and our politicians are to blame!!

[hey0there]

i welcome it. anything to compete with the insipid trash DisneyCorp spews out on a daily basis.

Besides, its not all gloom and doom. Nobody is wired into a TV set and forced to watch anything.

[pershingwarrior]

They will never survive making people "pay" for content. There are too many ways to communicate. Someone will pay for access, to say, MSNBC. Then they'll post it on one or another technological venue. Then they'll tell two friends, and so on, and so on. That, or we'll just cut off our own internet addiction. As an addict, I'll say good riddance. Like my smokes.

[aflyinyoursoup]

".....If President Obama really wants to change the system that green-lighted the bailout of "too big to fail" banks and would allow the looming crisis of too-big-to-block media mergers, he will have to overhaul federal antitrust laws so that they actually protect the greater good....."
Here we go with the, "Obama can change this and The President should change that", nonsense.
Flash: The only entity that can change laws concerning matters of this nature is the US Congress.
And it ain't gonna happen because that 'maggot-infested dung-heap' is owned and operated by the Ruling-Class.
These 'Mergers' have been going on for decades now, and the process is accelerating. The goal is to concentrate the worlds wealth and power into the hands of a very few.
If you suffer the notion of 'Democracy', get over it. Voting is a 'Mind-Trap'.
If we are serious about regaining any semblance of Egalitarianism we must first avoid the ruse of our neutralized and worthless political system.
We must then engage in a coordinated 'legal' consumer's Revolt:
Focused Bank Runs
Focused Boycotts
General Nationwide Strikes
Mass Demonstrations
Non-Frivolous Corporate-Focused Law Suits
If we continue to acquiesce to our Corporate-Created Consumption Mind-Set we are forever doomed as abject slaves.

[Cinqueorange]

I agree with this!

[MicheleCA]

I too agree with you.

[GunnyJ]

Thank you. Where is this magic wand President Obama is supposed to have???????