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Wednesday, December 08, 2010

Opinion: Comcast-NBC: The real dangers - Josh Silver - POLITICO.com

Opinion: Comcast-NBC: The real dangers - Josh Silver - POLITICO.com

Regulators are due to decide on Comcast’s purchase of NBC Universal in the next few months. If approved, it would contradict the tough talk from Barack Obama-the-candidate, who, in 2008, promised a “reinvigoration of antitrust enforcement.” “I strongly favor diversity of ownership of outlets,” Obama said during the campaign.
If you’re trying to reconcile Obama’s rhetoric with the fact that Washington oddsmakers predict the merger will be approved by his Justice Department and Federal Communications Commission, you’re not alone.

Comcast is the nation’s largest residential Internet provider and the largest cable television company. If the merger is approved, it will own one of the nation’s largest content providers. That means that Comcast will exercise enormous control over what you watch and how you watch it – online, on cable and over the air.

Comcast’s pre-merger market power is already stunning. Today, in 97 percent of American communities, consumers have two or fewer broadband providers — the result of decades of corporate-friendly changes by the FCC, which gradually eased competition policies.

In this evolving media landscape, the United States has slipped from No. 4 to No. 22 internationally in broadband adoption, and dropped to 19th in speed over the last 10 years. While our speeds are slow, the costs are high — leaving us neck and neck with tiny Estonia.

This slide threatens the future of U.S. innovation, education and economic growth. And it makes the potential Comcast/NBC megalith an even bigger threat to our media and technology future.

This list of reasons that the merger should be blocked is long, and Comcast’s involvement in particular should raise even more red flags. The company has a long history of bad behavior, including blocking Internet traffic, bullying competition, jacking up prices and lying to lawmakers.

A “Chicken Little” warning? Consider the facts:

Think your cable bill is sky-high? Brace yourself for the post-merger reality. Comcast already raises its prices with alarming regularity, but soon it’ll have more power to charge its competition (and the public) for NBC content and to charge advertisers far more for space on Comcast platforms. The merger is likely to result in $2.4 billion in costs to consumers over the next decade, according to a study by William Rogerson of Northwestern University for the American Cable Association. That’s 10 times the estimated benefits ($204 million) Comcast claims that consumers will reap

As online products like video and gaming take up more and more bandwidth, phone companies’ DSL service will soon be obsolete — leaving Comcast and its cable brethren with a natural monopoly in broadband access.

It is estimated that, in the near future, more than 75 percent of Americans will have access to just one provider of video-quality high-speed Internet: cable. For many, Comcast – with its 24 million subscribers nationwide – will be it.

Worried yet? Post-merger, Comcast is predicted to control one in every five television viewing hours. It would have both a powerful motive and newfound leverage to prevent Internet TV upstarts from challenging its distribution of television service.

In fact, it’s already happening. Recently, the Internet company Level 3 alleged that Comcast demanded additional fees to deliver content requested by Comcast’s own customers. By no coincidence, this demand came soon after Level 3’s agreement to carry Netflix’s streaming online video services.

See how it works? Comcast demands higher fees for Level 3; Level 3 passes those costs on to Netflix. The next thing you know, you are paying more for cable, more for Internet access and more for streaming services like Netflix.

By far the biggest problem with the pending merger is Comcast’s new market dominance and its adverse affect on online video and independent voices. The company can use its vertically integrated power to refuse to license NBC-Universal TV and film content to both existing and emerging online TV providers -- like iTunes. If Comcast were to overcharge or starve these businesses of the content they need to secure a foothold in the marketplace, it could be able to stifle competition -- and lock consumers into the old cable model.

Comcast can also use its control over the broadband pipe to degrade its customers’ connection to competing Internet TV providers and to enhance access to Comcast’s own online video platforms like Fancast Xfinity TV. If Comcast customers have to choose between access to rival online video services that sputter or to Comcast’s own online video service, which runs smoothly – which do you think they’ll choose?

If you believe in competition, innovation, and independent voices, you should be concerned about this merger. If you believe that television channels are already heavy on cheap-to-produce programs, infomercials and low quality news, you should be worried – consolidation increases profit pressures, which lead to newsroom layoffs, more commercials and mediocre, mind-numbing programs.

This could be the new face of media consolidation – a dangerous trend that has gutted commercial journalism and left citizens with fewer choices and less information from a dwindling number of sources.

The bogeyman in this scenario is the hallucinatory claim that the public is likely to benefit from tighter corporate control of the nation’s media platforms.

Josh Silver is the president and chief executive officer of Free Press, a national nonprofit group to help reform media.

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