comcast’s great takeover

Following yesterday’s US Justice Department announcement that it will conduct an antitrust review of the planned takeover of NBC by Comcast, Free Press (a nonpartisan and nonprofit media reform group) released an open letter to President Obama today pleading for the administration to take a “hard look” at the consequences of the proposed deal. With twenty-five organizations as signatories, the self-described ad hoc group of public, labor and industry organizations is sharply challenging the administration in an effort to thwart the deal. The proposed deal would see the nation’s largest cable provider have a fifty-one percent stake in the merger, putting combined assets above the world’s current largest media company, Walt Disney. Thanks to NBC’s online video distribution, the deal would allow Comcast to be involved in the online video segment.

With the advent of horizontal media (ie. Web 2.0 and user-created content), digital advocacy groups have organized to ensure access of free interactive media content. The Comcast/NBC deal has been met with considerable criticism in some circles since its

formal announcement last month. Comcast has agreed to voluntary commitments which include increased local programming to stave off some concerns.

Internet advocacy groups have argued that Comcast could restrict online competition with satellite and phone providers offering online content, ultimately limiting consumer choice. Today’s Free Press letter asserts that the merger would have a disastrous effect on consumer choice and online video distribution stating, “control of NBCU programming also would give Comcast the opportunity to prioritize its own online video products over those of its competitors – or sharply reduce online video distribution altogether – pushing independent producers out of the picture.”

Comcast is betting that adding online content will prove beneficial to its longterm goals as more consumers are more willing to pay for better broadband and potentially more content. With NBC.com and Hulu.com (a joint NBC venture with Disney and News Corp.) the merger is seen as an attractive proposition by many analysts. Steve Burke, operating chief at Comcast, recently told the Wall Street Journal that cable and Internet can have a symbiotic relationship to “make sure that those great revenue streams related to affiliate sales are not harmed.” (WSJ, 12/7/09). Regulatory hurdles have been anticipated since last fall when the proposal was initially devulged.

courtesy of January 7, 11:14 AMSan Jose Web 2.0 ExaminerBonnie Boglioli-Randal