Comcast-NBCU Is Bad For Broadcasting

Within hours of the announcement last week that Comcast had agreed to acquire a controlling interest in NBCU and its vast array of broadcast and cable properties, Andy Schwartzman of the Media Access Project sent out an e-mail to reporters raising concerns and calling on the government to scrutinize it carefully.

No one in Washington policymaking circles was surprised.

For more than three decades, Schwartzman has been working for open and diverse media -- that is, policies that limit media concentration, insure access to media by citizens and encourage diversity in media ownership.

Those goals have regularly brought him into conflict with media companies and their seemingly irresistible urge to merge. The battles have been fought mostly at the FCC and in the courts.

In this interview with TVNewsCheck Editor Harry A. Jessell, Schwartzman spells out some of his concerns about the Comcast-NBC combination, which includes his belief that it will put all TV broadcasters outside of the NBC family at risk. He also explains why the FCC's cash-for-spectrum proposal is a bad idea.

An edited transcript:

So what's the problem with the Comcast-NBC deal?

We're unhappy about vertical integration in the media market to begin with. This one is especially troublesome because the cable programming market has been too difficult to crack. This combination gives Comcast all the more reason to make it difficult for new and interesting programmers to get carriage. It will also make it much harder for competitors like the phone companies and the satellite companies to get programming under similar terms and conditions. So it will adversely affect viewer choice. I would add it's also likely to raise cable rates.

What about the broadcasting side? Any thoughts on whether it would be good or bad for TV stations?

Yes. In those cities where Comcast is the dominant cable company as well as the owner of an NBC station, there will be a lot of problems for the other network affiliates. The ability to sell advertising across platforms will give a distinct edge to the Comcast stations. While [Comcast CEO] Brian Roberts talks about paying for retransmission consent, the fact that he can get the NBC content for free is going to give him more leverage in retransmission consent negotiations with other affiliates.

Is that such a serious concern that the government should put conditions on the deal?

I think conditions on that and a number of other adverse aspects of the deal should be a bare minimum to attain approval from the FCC and antitrust authorities.

Well, what's the particular fix for cable-broadcast crossownership in the local markets?

This is early in the game and we haven't thought this through completely, but you might have to have some sort of protection that assures that NBC stations are not advantaged in retransmission consent negotiations fees with other competing affiliates.

What about the deal's impact on the distribution of NBC programming on the Web?

If Comcast pulls the plug on Hulu or withholds NBC programming from Hulu and other online competitors, this important new platform, which may be very important for broadcasters, will be jeopardized and broadcasters will be at the mercy of the cable companies with their TV Everywhere-type schemes.

Could you elaborate on that a little bit? Why should that bother broadcasters?

The delivery of programming over the Internet is important not just for viewers, but for broadcasters because they can develop additional advertising revenue streams with advertising on Hulu. Comcast has an interest in making sure that the competing video- over-Internet offerings don't get off the ground and, instead, wants to migrate everything to its TV Everywhere-approach where it seeks to grab revenue that otherwise would go to a competitive source. It's not good for broadcasters and it's certainly not good for the public.

What about the newspaper-broadcast crossownership rule. Isn't that an anachronism now?

No. I don't think it's an anachronism. I just attended a two-day conference [on the future of journalism] conducted by the Federal Trade Commission and one of the important takeaways from that is that newspapers continue to be profitable on an operating basis. The red ink is largely from debt and bad decisions that were made in paying too high a price to acquire property.

The studies presented at the conference also showed that daily newspapers continued to be the most powerful force shaping local public opinion and voting behavior, with local TV second. Combining those two forces is more influence than any one person or company should have in a community. That was true when the FCC adopted the rule and it's true today.

You make it sound like the debt isn't a real expense. It is a real expense and they're stuck with it and if they don't make their payments, they're going to go under.