MSNBC News Junkies Beware: Comcast's Likely Acquisition of NBC May Threaten Your Access to Independent Media

BUZZFLASH NEWS ANALYSIS
by Meg White

Business sections across the country are all abuzz this week over the expected announcement that Comcast Corp. will acquire a controlling share of NBC Universal. But should MSNBC viewers be particularly concerned about the nation's largest cable provider and second largest Internet service provider obtaining one fourth of the media content available to U.S. audiences?

The process of the acquisition itself is somewhat complicated, and could take up to a year to complete. First, Vivendi SA must sell its 20 percent of NBC Universal to General Electric Co., which already owns 80 percent. Then GE would sell 51 percent of the company to Comcast.

This Reuters piece suggests that GE might try to sell its interest in NBC entirely over the next few years, precisely because media is something of an awkward addition to a company profile which includes defense contracting and nuclear power:

In the case of GE, many of its shareholders have urged the conglomerate to offload NBC Universal, whose broadcast and cable networks, movie studio and theme parks are considered misfits among GE's mostly industrial operations.

The parties have discussed an option for GE to sell all or part of its stake in the new venture to Comcast within seven years, sources have said previously.

Comcast lists nine channels that it owns as well as one coalition of channels (Comcast Sports Group), bringing you everything from E! to PBS on demand. In addition to phone, Internet and cable, Comcast is diving into the multi-platform market. Possible programming changes at your favorite network aside; this is bad news for media consolidation.

Josh Silver, executive director of Free Press, a nonprofit organization working for media reform, likens the problem to what occurred with excessive consolidation in the financial industry that led to the economic crisis:

This train wreck of a deal will hurt all over. It will mean increased costs for cable television service; currently free online NBC content locked behind a pay wall; less opportunity for the distribution of independent media; even fewer choices and less programming diversity. On average, nearly one quarter of all channels offered to cable subscribers will be owned by the bloated Comcast.

Silver and others are calling on the Obama Administration to block the acquisition. But as has been typical of media coverage of the pending acquisition, this Wall Street Journal piece takes a soothing tone:

The government is unlikely to derail the tie-up, legal experts and others familiar with the matter say. But regulators would likely impose restrictions to mitigate potential harm to rivals and consumers...

Antitrust experts say that, on paper, there is little to suggest a Comcast-NBC combination would seriously threaten competition in media, as people increasingly spread their leisure hours across a multitude of diversions.

Yet, "as people increasingly spread their leisure hours across a multitude of diversions," they are increasingly going online, which is one key place where this merger will increase Comcast's market share. In fact, those who pledge to escape the Comcast television monopoly by obtaining all of their cable content online may find clips of The Rachel Maddow Show and Countdown scarce.

Comcast's "On Demand Online" or ODOL service, which Comcast advertises as striving to "bring significantly more TV content to customers online than has ever been available before" is especially troublesome.

Currently in testing, ODOL seems nearly identical in concept to NBC's Hulu.com, where a portion of that network's content is available to watch online for free. Presumably, Comcast could merge these two services and everything you watch on Hulu -- or MSNBC's video site for that matter -- would be available on a pay-per-view basis only.

Now, the merger itself isn't exactly a David vs. Goliath story. GE is a consolidated conglomerate in its own right, with its hands in everything from energy to finance to healthcare. But while it may be somewhat troubling to have a company such as GE sell you your refrigerator, the light bulb that goes in it and the energy that runs that light bulb, media consolidation is a whole different kind of monopolistic monster.

We're talking about something far more integral to the American dream than light bulbs. This is about the ability to be heard when you're not a huge corporation backed by a fortune's worth of soapboxes. And as far as companies that are downright hostile to consumers and independent media, Comcast is competing for number one.

Comcast consistently rates lowest in terms of customer service, when compared to both national companies and cable companies alike. But what's most reprehensible is their distaste for media independence and competition. Comcast's opposition to the FCC's suggestion of pursuing stronger net neutrality regulations is a prime example of this attitude.

For those who aren't aware, net neutrality is the idea that Internet service providers should not be able to give preferential treatment to users or content sources. For instance, Comcast shouldn't be able to make TMZ's Web site load slower than that of its cable channel E! just because it has a controlling interest in viewership at E!.

Unfortunately, there's every indication that Comcast might start doing exactly that. Perhaps their opposition comes from the fact that Comcast was the very first U.S. Internet provider to be found guilty of violating existing net neutrality laws. Comcast was blocking and/or slowing access to a peer-to-peer (p2p) software sharing site call BitTorrent, which happened to compete with Comcast's own video service.

After first denying it had done anything of the sort, Comcast eventually admitted to throttling the p2p traffic in what it insisted was an effort to smooth online traffic bottlenecks. Now that the FCC ruling against the company is being heralded as a good reason to pursue stronger net neutrality rules, Comcast is unsurprisingly rallying against such a regulatory change.

There's a lot of unfounded speculation that Comcast would dump hosts from MSNBC's line-up such as Rachel Maddow, Keith Olbermann and the like. As of right now, MSNBC is making the same amount of money as it did in the fever of a presidential election last year. The New York Times points out that their revenue now is significantly greater than it was "before making a left turn."

Some insist Comcast has an inherently anti-MSNBC stance. Back in August this Daily Kossack said that, due to a channel realignment, MSNBC was no longer offered in their area's digital starter package, though FOX news was. I checked Comcast's offerings for my area, and MSNBC is included in that basic package. But the packages appear to differ from region to region.

The Wall Street Journal article notes that Comcast does have a history of flexing its monopolistic muscles in local television markets:

Dish Network Corp. and DirecTV Group Inc. have longstanding complaints with the FCC, saying Comcast refuses to let them carry its Philadelphia regional sports network on their satellite networks. The companies say that gives Comcast an unfair advantage because fans of the Philadelphia professional hockey, basketball and baseball teams are wary of switching from Comcast to a satellite-TV service.

There are many areas of the country where Comcast is the only choice if you want cable service, culminating in a class-action antitrust case pending against the company in Pennsylvania. Does the acquisition that mean that subscribers would face a monopoly of content, as well as service, in the future?

In an interview Monday, Comcast's Executive Vice President David Cohen said it was "totally appropriate" for Comcast to own content as well as distribute it. He also reserved the right to charge heavy Internet users more than light users, another front in the net neutrality battle.

No signal has come that the Obama Administration will block the acquisition, which most media outlets interpret as a green light. But this is a first test for an administration that has, at least in terms of rhetoric, opposed media consolidation.

On Monday, the Justice Department's Antitrust Division announced five upcoming workshops on merger guidelines. As they take input from the public on issues such as market concentration and the hypothetical creation of a monopolist test, surely Comcast will come up. And while it hasn't been tried yet, President Obama's attitude toward antitrust issues appears to be less permissive than that of President George W. Bush.

Whether on the basis of media consolidation, monopoly, or net neutrality, the government should act here. When a company with such a history of scorn for independent media, competition and the democracy of the Internet as Comcast owns the content as well as the mode of delivery, everyone loses.

Except for Comcast, of course.

BUZZFLASH NEWS ANALYSIS

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