Wednesday, February 3, 2010; 12:00 AM
Comcast's plan for a joint venture with NBC Universal threatens consumers, and possible remedies could be rendered "meaningless," an American Cable Association board member will tell a congressional panel Thursday.
"This is an unprecedented deal, which, if consummated, would substantially increase the market power of Comcast, threatening consumer and competition in the traditional and the rapidly evolving Internet content and distribution areas," according to written testimony from Colleen Abdoulah, president of WOW!, which competes with Comcast in Chicago and Detroit.
"Comcast has proven itself particularly adept at weakening or even rendering meaningless any such relief," according to her testimony.
A copy of her testimony and others' was obtained by Reuters.
Abdoulah -- perhaps mindful of the belief in the Washington antitrust community that the Justice Department declined to challenge the Ticketmaster-Live Nation deal because of the difficulty of challenging deals in the same supply chain -- sought to portray the joint venture of Comcast, the top U.S. cable provider, and NBC Universal as a deal between rivals.
"The deal greatly increases horizontal concentration by effectively combining key content assets from the two firms, as well as important distribution assets," according to her testimony, prepared for a subcommittee of the Energy and Commerce Committee.
In other testimony, affiliates of NBC Universal said they were pleased with reassuring statements from Comcast and NBC about supporting free television but that they were looking for solid commitments to back them up, Michael Fiorile, chairman of the NBC Television Affiliates Board, will tell the congressional panel.
Affiliates' concerns focus on whether Comcast will have the incentive to invest in and offer the best shows to NBC affiliates and whether they would be offered to cable stations or streaming video sites.
Comcast is the No. 1 U.S. residential Internet service provider, and NBC owns a third of Hulu.com, the most popular U.S. Web site for viewing TV shows.
Comcast and NBC's assurances have "been a very welcome start to this process," according to text of Fiorile's testimony.
"Our discussions with Comcast, however, have just begun, and we must now progress beyond general statements of intent. In the weeks ahead, the affiliates board and Comcast have much hard work before them to reach clear, specific, documented and enforceable conditions defining what it means in practice for the new Comcast-controlled NBC to be 'committed' to the network-affiliate model."
The joint venture must be approved by the Federal Communications Commission and the Justice Department's antitrust division.
Under the terms of the deal, Comcast would get 51 percent of a new joint venture that includes NBC Universal, valued at $30 billion, and Comcast's own cable networks, valued at $7.25 billion. GE would own the remaining 49 percent. As payment for its stake, Comcast will contribute $6.5 billion in cash and its cable networks.