Tuesday, January 18, 2011

"Cable-ization of the open Internet": Comcast/NBCU deal approved

The Federal Communications Commission and Department of Justice have blessed the mega-merger of Comcast and NBC-Universal. The combined company has agreed to a huge list of conditions, most of which will be made public later, that eroded much of the resistance among four FCC Commissioners. But the lone holdout, Commissioner Michael Copps, lived up to his unofficial title as the Grumpy Old Man of the FCC (and we mean that in the most complimentary way).

Copps' statement after the vote is stuffed with some truly inspired ranting. One bit in particular stands out:

The Comcast-NBCU joint venture opens the door to the cable-ization of the open Internet. The potential for walled gardens, toll booths, content prioritization, access fees to reach end users, and a stake in the heart of independent content production is now very real.

As for the future of America’s news and journalism, I see nothing in this deal to address the fundamental damage that has been inflicted by years of outrageous consolidation and newsroom cuts. Investigative journalism is not even a shell of its former self. All of this means it’s more difficult for citizens to hold the powerful accountable. It means thousands of stories go unwritten. It means we never hear about untold instances of business corruption, political graft and other chicanery; it also means we don’t hear enough about all the good things taking place in our country every day.

The slight tip of the hat that the applicants have made toward some very limited support of local media projects does not even begin to address the core of the problem. Given that this merger will make the joint venture a steward of the public’s airwaves as a broadcast licensee, I asked for a major commitment of its resources to beef up the news operation at NBC. That request was not taken seriously. Increasing the quantity of news by adding hours of programming is no substitute for improving the quality of news by devoting the necessary resources.

Make no mistake: what is at stake here is the infrastructure for our national conversation—the very lifeblood of American democracy. We should be moving in precisely the opposite direction of what this Commission approves today.

The size of the deal leaves mere mortals reaching for thesauri. The new company will control Comcast's US-leading cable network, 234 NBC affiliate stations, the Telemundo Spanish-language network, the NBC television network, TV production studios, the Universal movie studio, the Universal theme parks in LA and Florida, channels like MSNBC and CNBC, and a stake in Hulu. Comcast already controls its own empire of content, including TV channels like E! and G4, and it runs the Philadelphia Flyers NHL franchise and the NBA's Philadelphia 76ers.

As part of the deal, Comcast avoided requirements to open its network to other ISPs and cable operators at wholesale rates. It did, however, agree to a host of conditions that it would not use its programming or network as an anticompetitive bludgeon. In addition, Comcast/NBCU must provide its TV programming to online distributors who want it and cannot "exercise corporate control over or unreasonably withhold programming from Hulu."

Comcast is also prohibited from "unreasonably discriminating in the transmission of an online video distributor's lawful network traffic to a Comcast broadband customer." In addition, the company must continue to offer at least 12Mbps broadband service in areas where it has upgraded its network. Comcast is also required "to give other firms’ content equal treatment under any of its broadband offerings that involve caps, tiers, metering for consumption or other usage-based pricing."

The sheer number of specific conditions attached to the deal led the two Republican FCC Commissioners to issue a joint statement attacking the merger proceedings as an old-fashioned stick-up.

"The Commission’s approach to merger reviews has become excessively coercive and lengthy," they wrote. "This transaction is only the most recent example of several problematic FCC merger proceedings that have set a trend toward more lengthy and highly regulatory review processes that may discourage future transactions and job-creating investment."

Comcast CEO Brian Roberts called this "a proud and exciting day for Comcast,” and he expressed enthusiasm for the consumer benefits that will rain down upon a thirsty land.

“Our original vision for the combination remains intact so that consumers will benefit, and our competitors will be treated fairly," he said—the interests of "competitors" and "consumers" being the two chief things that massive cable networks have always been well-known for prioritizing.

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