The FCC’s recently approved net neutrality rules will prohibit all Internet service providers from blocking any legal content from being sent or received by their users. But when an ISP also controls the nation’s largest pay-TV audience, perhaps it could use that leverage to prevent certain content from ever going online in the first place.

That’s the position of Dish Network, which recently launched its standalone Sling TV streaming (or over-the-top) service and which fears that Comcast — especially a Comcast that merges with Time Warner Cable — could make broadcasters offers they can’t refuse.

“Even if the net neutrality rules are upheld in court, there are innumerable ways that Comcast-Time Warner could sabotage over-the-top,” explained Jeff Blum, senior vice president and deputy general counsel of Dish. “And over-the-top is a reality. It’s something that is good for consumers.”

Comcast currently has around 22 million pay-TV and broadband subscribers, and that number will increase to more than 30 million if the TWC merger is approved. Only DirecTV, with around 20 million subscribers but no fixed broadband service to offer, comes close in audience size.

Blum contends that Comcast could cripple services like Sling or Sony’s upcoming over-the-top offering by giving all-or-nothing ultimatums to cable TV networks.

He gives the hypothetical example of Comcast negotiating a new contract with the Discovery Network and saying, “OK, Discovery, you want carriage on Comcast-Time Warner — our 30 million homes — we’ll give it to you, but you can’t grant the following over-the-top rights to Netflix or Sony or Dish.”

In a statement to the International Business Times, Comcast points out that it’s currently forbidden from making a deal like Blum describes because of conditions placed on Comcast’s 2011 acquisition of NBC. However, those conditions expire in 2018.

“Dish has long been one of our most vigorous competitors, and unlike us has a national footprint available in tens of millions of more homes than a combined Comcast-Time Warner Cable,” reads the Comcast statement. “Dish not wanting stronger competitors isn’t surprising and it isn’t new. Any issues regarding NBCUniversal programming and other video services, whether they be traditional or over the top are already amply covered by pre-existing FCC rules and deal conditions.”

But Blum believes that it’s Comcast — which faces virtually no competition for broadband in most of its markets — which is afraid of streaming offerings like Sling.

“Over-the-top services compete against Comcast-Time Warner,” he said. “They want people signing up for their Xfinity bundle, and they don’t want people signing up for the Sony over-the-top-service, or Sling TV or HBO Go. It’s a direct competitor.”

The Comcast-TWC merger is in the final stages of the regulatory review process. Decisions whether to approve, block, or place conditions on the deal should be coming from the FCC and Justice Dept. in the near future.

[via DSLreports.com]

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