ACA To FCC: Strengthen Program Access

Following the expiration of the FCC’s Comcast-NBC Universal merger conditions two days ago, American Cable Association President-CEO Matthew Polka today urged the FCC “to examine and then address the harms that a ‘vertically integrated’ Comcast-NBCU can cause — the same harms that led the Department of Justice to seek to block the AT&T-Time Warner merger.

“In 2011,” he continued, “the FCC and DOJ each found that Comcast’s acquisition of NBCU would harm competition by combining NBCU’s ‘must have’ video programming with Comcast’s distribution network. The FCC and DOJ permitted Comcast to buy NBCU — but only if the parties abided by a series of conditions that ostensibly would alleviate the competitive harms. ACA participated extensively in the review of the Comcast-NBCU transaction, and, although we preferred even stronger governmental restrictions, we believed that the conditions imposed could help prevent the worst harms.

“The competitive concerns about vertical integration raised seven years ago by the FCC and the DOJ are undiminished today and require continued significant scrutiny.

“The DOJ two months ago expressed concerns about ‘vertical integration’ of content and delivery networks. In filing suit to block AT&T’s acquisition of Time Warner, it explained that the combination, by virtue of its control of ‘must have’ content, would ‘hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for Time Warner’s networks, and it would use its increased power to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers.’ Yet by all accounts, the programming controlled by Comcast-NBCU is at least as ‘must have’ as the programming that AT&T would acquire under its proposed merger with Time Warner. Comcast-NBCU’s national bundle, major broadcast networks, and regional sports networks rank among the most essential networks that distributors must carry to attract subscribers.

“In the face of this enormous potential for harm, the FCC cannot stand by. It should at least:  

• Strengthen its program access rules, including by determining whether an arbitration remedy and standstill condition, like the ones found in the Comcast-NBCU conditions, should be made available.
• Correct its flawed definition of a ‘buying group’ for program access purposes, allowing the National Cable Television Cooperative to qualify and file program access complaints and thus affording small and medium-sized MVPDs that rely on the NCTC to negotiate programming deals the same level of protection as large MVPDs, which was the intent of Congress.”