The proposed merger between the cable company Comcast Corp. and entertainment giant NBC Universal was heavily criticized Monday by some rival media companies and consumer advocacy groups that are trying to persuade the Federal Communications Commission to block the $30-billion deal.
Announced last December, the pairing of Comcast and NBC Universal would put under one roof the nation's biggest cable and broadband provider and an entertainment conglomerate whose holdings include broadcast networks NBC and Telemundo, cable channels CNBC, Bravo and USA, the Universal Pictures movie studio and more than two dozen local television stations.
Since then, industry watchdogs, some lawmakers and competitors have expressed concern about one company controlling so much of the media landscape. On Monday, they registered their displeasure by filing comments with the FCC. Besides the FCC, the Justice Department is also reviewing the merger. A decision on whether the deal will be allowed to go through and what conditions may be imposed on it is expected late this year or early next year.
Although there was no shortage of complaints to the FCC about the proposed merger, the bulk of big media stayed quiet. Viacom Inc., Time Warner Inc., CBS Corp. and News Corp. all indicated they would not file comments on the deal. Walt Disney Co. was also expected to refrain from commenting.
Among the media companies critical of the combination were satellite broadcasters DirecTV Inc. and Dish Network Corp. as well as financial news firm Bloomberg.
Dish, which competes for subscribers with Comcast, told the FCC that the marriage of Comcast and NBC Universal "poses a direct threat" to the satellite industry's ability to offer a competitive product. Dish and DirecTV fear that Comcast will withhold content from its rivals.
Bloomberg, which has a cable channel that competes with CNBC, said in a letter to the FCC and Justice Department that "Comcast will have every reason to undermine the many independent news, sports and entertainment channels that compete with the channels it owns." The letter was co-signed by the Communications Workers of America; the Writers Guild of America, West; the National Consumers League; and other media watchdogs.
Bloomberg's biggest concern is that Comcast would give CNBC a better channel position than its competitors. Cable networks often try to cut deals with cable operators to improve their channel position, and Bloomberg fears Comcast wouldn't play ball if it owned CNBC.
Appraising the comments on Comcast's corporate website, Executive Vice President David Cohen wrote that "certain competitors and programmers appear to be attempting to use the transaction review process as an opportunity to seek advantages and concessions outside of marketplace negotiations. We believe these efforts should be rejected."
How Comcast could use NBC content to benefit its own broadband operations is also a worry for some. Public Knowledge, an advocacy group focused on the Internet, said the FCC must insist on conditions that would stop a combined company from favoring its own content online versus content from competitors and from withholding its own programming from rival online services.
Although the Writers Guild has voiced opposition to the deal and other guilds may follow, the Directors Guild of America has sent a note of support to the FCC.
In a letter from executive director Jay Roth, the DGA told the FCC that Comcast would be a better owner for NBC than General Electric Co. has been. Comcast, Roth wrote, has a commitment to "grow the industry, infuse new capital into the entertainment business and invest additional resources into programming," which will "represent a change from the uncertainty caused by many of the current owner's past decisions concerning commitment to our industry, programming and jobs."
Some questioned whether Comcast meets the FCC's character requirements to own broadcast licenses. The Parents Television Council, a nonprofit organization that fights what it considers indecent programming, wants Comcast to disclose how much money it makes from offering adult entertainment and to force the cable company to promise not to use the public airwaves to distribute "pornographic or adult entertainment."