With Comcast-NBC conditions, Feds try to open a door to online video
Saturday, January 22, 2011; 5:19 PM
Ideally, nobody should have to worry about one TV and Internet provider buying a TV network. In that ideal world, you'd have enough choices for those services that competition would keep the newly combined company honest.
But we don't live in that world. In this one, Comcast - the nation's largest TV and Internet provider - has a monopoly in some homes and, more often, is one of two options for high-speed Internet and one of three or four for TV.
Whatever you read about the union of Comcast's video properties and those of NBC Universal, blessed by the government Tuesday, keep that in mind. This isn't a functioning market along the lines of an Economics 101 text.
Will they avert what opponents are calling a Comcastrophe, in which many people's least favorite company crushes its rivals? When David Cohen, Comcast executive vice president, summed things up on a conference call Tuesday by saying, "I don't think any of the conditions is particularly restrictive," does that mean Comcast got a free ride?
Most of the rules and limits fall into two categories: Those that aim to prevent abusive conduct against the Philadelphia company's current competitors and those that look to crack open the door to additional rivals in the video-service market.
(Comcast also pledged a variety of moves to increase the diversity of the programming put out by the combined Comcast-NBC Universal venture. That is a good thing to do, but it's also on Page 1 of corporate playbooks.)
On reflection, the terms imposed by the feds look a little more positive than they seemed Tuesday. The government didn't attempt to remake this company through regulation, but it does seem to have thought a few chess moves ahead.
The most important non-abuse provisions limit Comcast's ability to keep its and NBC's video content - including regional sports networks, cable channels such as MSNBC and the Universal Pictures movie library - from other services.
Comcast can no longer withhold selected programming (such as the sports networks it has refused to provide to satellite broadcasters in the Philadelphia market). And any carriage disputes over pricing will be settled in binding arbitration.
The company can't retaliate against other networks when they seek carriage on its own cable systems, although no binding dispute-resolution system will settle the inevitable dust-ups.
Comcast is also pledging to follow the basic net-neutrality rules enacted by the FCC - though any company in its position would say the same.