Why A Comcast/NBC Merger Is Bad News

As the Comcast/NBC mergepocalypse draws near, we wanted to remind readers of the ways that this is going to harm consumers (beyond the obvious things like 30 Rock being promised to come on between 6 and 10 pm and actually airing at 11:30). Join us for a sad look into the future.

Let’s Just Look At What Comcast/NBC Would Own
TV Stations: NBC, CNBC, MSNBC, Bravo, Chiller, CNBC World, mun2, Oxygen, Sleuth, Syfy, Universal HD, USA Network, The Weather Channel, E! Entertainment Channel, G4, Golf Channel, PBS Kids Sprout, Style, TV one, Versus, CN8, Exercise TV, FEARnet, AZN Television, a portion of MLB Network.

NBC owned and operated stations in New York, Los Angeles, Chicago, Philadelphia, Bay Area, Dallas/Fort Worth, Washington, Miami, San Diego, Connecticut.

Telemundo owned and operated stations in Los Angeles, New York, Miami, Houston, Chicago, Dallas/Fort Worth, San Antonio, Las Vegas, San Francisco/San Jose, Phoenix, Fresno, Denver, Boston, Tucson, Puerto Rico.

Film: Universal Pictures, Focus Pictures, Universal Studios Home Entertainment

Internet: Hulu (more on that below), iVillage, NBC.com, CNBC.com, Weather.com

That’s a lot of channels, and they’re ones that Comcast/NBC will be able to use as bargaining chips against other cable and internet providers who want to carry them. Comcast/NBC will have the incentive and means to discriminate against other channels that compete with NBC content, in favor of the NBC alternative.

For example, a recent story about the merger suggests that Comcast/NBC would challenge ESPN for sports content. Comcast’s own sports channel, Versus, would benefit from NBC’s pool of talent and production resources, but Comcast/NBC could prop Versus up in more ways. The most obvious thing Comcast could do to hurt ESPN, though unlikely, is refuse to carry the channel, thus depriving ESPN of all of Comcast’s cable subscribers. Another scenario is that whatever sports content that Comcast/NBC acquired and offered, like the Olympics, could be entirely exclusive to Comcast/NBC. That is, ESPN wouldn’t be able to run footage from Comcast/NBC events on SportsCenter. As a content and service provider, Comcast/NBC could even firewall its content, allowing only Comcast cable subscribers to see certain games or events. If Comcast/NBC decides not to block content entirely, they can still ransom it to other cable providers, charging higher prices for NBC content than NBC currently does. These expenses would of course be passed onto the subscribers.

More Mergers Will Happen, and Cable Rates Will Rise
If the Comcast/NBC merger goes through, it will lead to more media consolidation. Other service and content providers will merge in order to keep pace with Comcast/NBC, further limiting competition and increasing the possibility of collusion and price fixing, including rate increases. This was repeatedly seen in the late 1990s: after media ownership rules were relaxed, companies scrambled to buy up as many stations as they could to remain in equilibrium with each other (as a refresher, here’s a sickening breakdown of who owns what).

Say Goodbye to Free Streaming Video
Although Hulu has already announced that it will begin charging for content, Comcast’s acquisition of NBC, which, along with ABC and Fox, owns a substantial share of Hulu, would further harm the developing streaming video market. A merged Comcast/NBC would control both content—NBC programming—and distribution, and would have strong incentive to move its content behind its own pay wall. One hypothetical scenario would see Comcast/NBC pulling NBC content from Hulu, and making streaming NBC content available only to cable subscribers. Even worse, Comcast/NBC could further restrict streaming content to customers who subscribe to cable and internet, forcing customers who enjoy watching streamed content to sign up for unnecessary bundles. And by withholding content from any other streaming video service, whether free or subscription based, Comcast/NBC would harm their chances at viability.

Blocked content, rising rates, forced bundling, and more. Despite claims from NBC and Comcast that this merger would be “pro consumer,” the end result will be more restrictions on what content consumers can access and how they can view it. And it will inevitably be more expensive. Consumer and media rights groups are urging the FCC and/or Department of Justice to either block the merger outright or impose very strict conditions to prevent the problems listed above. To read more about the proposed rules, visit FreePress’s release on the merger.