Friday, February 5, 2010

NBC - Comcast Merger - Will It Be Approved

As Comcast and NBC present their case to the FCC why the merger should occur, many speculate if it helps or hurts free TV. Both companies say publicly that it will be better, but some worry that NBC will be turned into a cable model and others that it will be anti-competitive. One recent example is that Boxee has tried to place Hulu content on its service. Hulu, an NBC partnership, has said no. Under a Comcast ownership, the worry is that Boxee competes with Comcast products and would not be in Comcast's best interest. Owning content and distribution is problematic. For years, movie houses couldn't own studios for fear that they would not allow other studio product to be seen on the big screen. The analogy holds true here, too.

I also speculate what the future looks like. I see broadcast moving from digital, over the air and cable signals to an IP delivered product. Which affiliate you want to see is based on IP address and perhaps even zip code. As they and cable move to this model, the consumer will stop purchasing cable packages. Cable companies will charge more for broadband access to overcome the loss of the other two legs of its service, cable and phone. And consumers will seek more choices for those connections to broadband - cable, wireless, perhaps even other utility companies (electric), that can bring hi-speed into the home.

If Comcast owns a broadcast network, why would they facilitate this technological change. Like they have done with TV manufacturers, cable has hidden behind shoddy technology (set top boxes, Tru2way) to limit others from entering the cable space. Just now, we are seeing companies like Netflix work to bypass the cable limitations to reach the consumer directly. Why would NBC and Universal want to support this change if it only hurt their parent company.

In Multichannel, Senator Al Franken (D-Minn) looks at NBC's own history as a judge of what is likely to happen. "He said he was very concerned about the merger. He cited NBC claims in the early 1990s when the financial interest and syndication rules were phased out that networks would not favor their own programming over independents (those rules prevented networks from taking a financial stake in the domestic syndication of prime time programming). Franken pointed out that today NBC is the biggest producer of its own programming. He said that it is now 'routine practice, and you know it,' to demand at least part ownership in a show, and that independent status affects placement on the schedule." His concern is valid.

So NBC and Comcast will say what they must to get approval but it is important to see beyond their rhetoric to what this merged entity would really mean for the entertainment landscape. I believe it is not in our economy's best interest to approve this merger. It will limit competition, squash technological innovation, and ultimately hurt the consumer.

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