Media reform/labor groups want Comcast/NBC mega merger quashed
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12/03/09 Lisa Marzilli
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General Electric and Comcast announced a joint venture on Thursday that will give the cable company eventual control of NBC Universal. Earlier this week GE, which already owned 80% of NBC Universal, agreed to buy the remaining 20% from French media giant Vivendi. Worth nearly $6 billion dollars, the deal would allow GE to create an entertainment joint venture controlled by Comcast, the nation’s largest cable TV provider. Media reform groups across the county are organizing to try to block the merger which they say will result in higher prices, fewer choices and less innovation.

Comcast is a $34-billion business with 24 million subscribers, reaching nearly one out of every four homes in the country. NBC Universal owns NBC, MSNBC, CNBC, Universal Studios, 27 television stations and a host of other properties.

A coalition of groups including the media watchdog Free Press, the Communication Workers of America (CWA) and the Consumer Federation argue the Comcast-NBC deal would not only create a company with too much market power but also say the deal raises the most basic antitrust issues. Josh Silver is Executive Director of Free Press. “Pundits in Washington who are predicting that this merger will survive antitrust scrutiny simply haven’t done a careful analysis of the damage that this merger will do to competition in the video marketplace. They also don’t seem to understand the level of commitment of the new administration to reinvigorate the nation’s anti trust laws. President Obama has repeatedly stated his commitment to increase antitrust enforcement and has sharply criticized the Bush administration for failing to do so.”

The Comcast-NBC merger would control at least three distribution platforms; a major television network, the largest cable company and the largest internet service provider, which Silver says is unprecedented. “We’ve never seen this kind of consolidated control across so many platforms. This is particularly concerning since the internet provides the greatest opportunity in the history of communications to open up access in distribution of media content so that every American has a voice in the public square.”

Silver says there are parallels between what we’re seeing in the regulatory environment in media and what’s happened in the financial industry. “…and the status quo that makes conventional wisdom such that it seems a deal like this can move through relatively unhindered, that’s a broken concept and it needs to change. The President has repeatedly said he supports the tightening of antitrust and limiting corporate control and so do the American people.”

In an article on the Huffington Post last week, Silver argued that this “train wreck of a deal will hurt all over” in the form of increased rates for cable TV customers, currently free online NBC content being locked behind a pay wall, less distribution of independent media and less diversity in programming overall.

NBC Universal has a strong foothold in television, film and in online video with Hulu.com, which boasts nearly 40 million viewers. It was announced last week that broadcasters are already toying with the idea of charging customers for some content on Hulu.

Mark Cooper is Director of Research with the advocacy group Consumer Federation of America. He says Hulu is just a toe in the water but it’s a perfect example of the competitive rivalry between the content producer and the distributor. “When you take the content providers – and there are only 3 or 4 major national audience content providers – and you marry them to distribution as you do with Comcast, you destroy the possibility of that competition and that is, in my opinion, very important to the antitrust officials. So, Hulu is the perfect example of nascent competition on the internet platform as a threat to the market power of the cable distributors.”

George Kohl is Senior Director with Communication Workers of America (CWA) which represents some 700,000 in the information industries including employees of Comcast and NBC as well as 25,000 journalists. Kohl says that in the past Comcast has been willing to use its power to run up prices, roll over shareholders and screw its workers. “This really is unique in terms of Comcast’s ability to control what content gets out there, one, and two, on the NBC Universal side they’d be buying huge amounts of content to put over that distribution network. That combination gives them incredible power within the industry and they’ve demonstrated in the past they’re unafraid to use that power to their benefit in a non-competitive way. Comcast also has a long history of violating workers rights; firing pro union workers, launching aggressive campaigns to de-certify local unions and stalling contract negotiations.”

The Comcast/NBC Universal deal is expected to take at least six months to finalize, but it could take more than a year for federal regulators to approve or reject the deal. In the meantime Free Press is giving citizens a chance to make their voices heard with an online petition asking the Obama administration to stop the pending mega-merger. The website is stopbigmedia.com.

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