Bloomberg is worried that its chief competitor, CNBC, will have an unfair… (Matt Rourke, Associated…)
Business media conglomerate Bloomberg has accused Comcast Corp. of violating the conditions the federal government put on the cable giant in return for approving its merger with NBC Universal.
In a complaint filed at the Federal Communications Commission on Monday, Bloomberg said Comcast is required to position its Bloomberg TV cable channel near other news channels on its cable systems, which reach almost 23 million subscribers.
Bloomberg is worried that with Comcast as an owner, its chief competitor, CNBC, will now have an unfair advantage. Soon after the Comcast-NBC deal was announced in December 2009, Bloomberg started aggressively lobbying the FCC for conditions that would require the cable giant to put Bloomberg TV near CNBC on its channel lineups.
For example, in Comcast's Washington, D.C., cable system, Bloomberg TV is Channel 103, while CNBC (Channel 39) is packaged much lower in the lineup with news channels CNN and Fox News.
In its order approving the merger in January, the FCC included a section on the so-called neighborhooding of channels. Now the two companies are arguing over just what the regulatory agency meant.
One section of the order said: "Specifically, we require that if Comcast now or in the future carries news and/or business news channels in a neighborhood, defined as placing a significant number or percentage of news and/or business news channels substantially adjacent to one another in a system's channel lineup, Comcast must carry all independent news and business news channels in that neighborhood."
That, Bloomberg said, means that Comcast is legally required to move its channel closer to CNBC.
"This has become a test of how serious Comcast is about abiding by and implementing the conditions set by the commission," said Greg Babyak, head of government affairs for Bloomberg. "So far, Comcast is failing that test."
However, a footnote in the same order has Comcast arguing it is in compliance with the FCC's conditions on approving the deal.
"Our condition, however, would only take effect if Comcast-NBCU undertook to neighborhood its news or business news channels, which therefore would indicate that there was some value to neighborhooding despite additional search capabilities," the footnote said.
"The FCC clearly stated that 'we decline to adopt a requirement that Comcast affirmatively undertake neighborhooding,' " Comcast spokeswoman Sena Fitzmaurice said.
Further, she said that if Comcast did what Bloomberg wanted, "millions of customers will be subject to disruption and confusion required by massive channel realignments across the country, all to benefit an already-thriving, $30-billion media company."
"The FCC carefully crafted its moderate, forward-looking condition precisely to avoid this type of upheaval," she said.