WASHINGTON – Members of House and Senate antitrust committees expressed serious concerns Thursday over the pending merger of NBC Universal and Comcast,the nation's largest cable company.
Comcast is set to acquire NBC Universal unless the merger is blocked by the Department of Justice or the Federal Communications Commission. The deal has drawn ire from antitrust lawmakers who view it as a move to consolidate market power.
Witnesses in favor of and against the merger testified in separate hearings before House and Senate subcommittees Thursday. The merger faced stiffer opposition from members of the Senate committee,with House members splitting mostly along party lines.
Under FCC regulations,large networks must share “essential programming,” such as emergency broadcasts and major sporting events,with competitors. Those rules are meant to keep a handful of companies from dominating the market.
If the deal is approved,some lawmakers worry Comcast would move NBC's essential content from free,over-the-air broadcasts to subscription-based cable channels,forcing customers and companies to use Comcast to gain access that content.
In a hearing before the House Subcommittee on Communications,Technology and the Internet,Rep. Henry A. Waxman,D-Calif.,said he is worried the merger could limit consumer access to programming.
“Might the Olympics or the Super Bowl one day only be available to paying customers?” Waxman asked in his opening statement. “We must consider how this transaction will impact the coverage of local news and events as well as major televised events.”
If NBC and Comcast merge,the resulting firm will control 12 percent of the U.S. video programming market.
The CEOs of NBC Universal and Comcast sought to assuage lawmakers' doubts.
Comcast's Brian L. Roberts and NBC's Jeff Zucker said in a joint statement that Comcast has no plans to move NBC's programming to cable. They added that the merger would help them compete in a changing marketplace and create much needed jobs.
“This deal will not change the fundamental competitive dynamic,” Zucker said to the Senate Subcommittee on Antitrust,Competition Policy and Consumer Rights. “The big winner here is the consumer.”
Roberts and Zucker said their companies do not compete directly,so the merger will not decrease competition. They said the merger will help both companies improve technology and allow consumers better access to content via the Internet.
In addition,Comcast has vowed to yield to FCC regulations requiring it to share its essential content. Roberts told senators the new company will provide more local and children's programming for its affiliate stations.
Senators were skeptical. Sen. Al Franken,D-Minn.,who worked for NBC's “Saturday Night Live” before running for the Senate in 2008,said he is unconvinced of the companies' motives.
“What I know from my previous career has given me reason to be concerned,” Franken said. “You'll have to excuse me if I don't trust those promises.”
Franken and other lawmakers fear the deal could begin a new round of media consolidation. Rep. Doris Matsui,D-Calif.,said she is worried other distribution companies will want to buy networks if Comcast is allowed to acquire NBC. She said the resulting “domino effect” could decrease consumer choice and raise prices.
Witnesses against the merger said Comcast has downplayed the competitiveness between itself and NBC. Mark Cooper,director of research for the Consumer Federation of America,said the two corporations compete in a number of ways.
Cooper said NBC is a stakeholder in Hulu,a Web site that allows users to view television shows online for free. Fancast,a comparable Web site owned by Comcast,competes with Hulu. To merge the companies would eliminate that significant competition in the growing field of Web-based television,Cooper said.
Zucker said the merger is necessary to protect both companies in the highly competitive world of video programming,but other witnesses said the merger would put smaller cable companies at risk.
Colleen Abdoulah,CEO of Wide Open West,a cable and Internet provider based in Colorado,said her company will be at the mercy of Comcast if the merger goes through. Comcast might share its content,but it can still set the price and conditions because of its size,she said.
“The balance of power has gone totally upside down,” Abdoulah said to the Senate committee. “[Customers] don't have the choice,because we're told how to deliver the product.”
Zucker denied that NBC or Comcast would inflate prices if the companies merge. If the price of programming was artificially high,fewer networks would carry it,he said.
Not all lawmakers saw the deal as negative. The senior Republican on the House subcommittee,Rep. Clifford Stearns,R-Fla.,said the merger will not threaten competition. It will promote innovation and benefit consumers,he said.
The committees cannot act directly to stop the merger,spokeswoman for both committees said,but members' recommendations could persuade regulatory agencies to stop or modify the merger deal.
NBC Universal's current owner,General Electric Co.,is selling 51 percent of its ownership in the broadcasting company to Comcast.