Dec 01, 2009
On Monday night, French media giant Vivendi and NBC parent company General Electric agreed to terms
that clear the way for US cable giant Comcast to take a controlling
stake in NBC Universal. An announcement from Comcast is expected within
days. The proposed merger would create a media behemoth, and clear the
way for an unprecedented era of media consolidation across cable, the
Internet and broadcast television.
Be afraid. Comcast is both the largest cable company and the largest
residential broadband provider in the United States: a $34-billion
business with 24 million subscribers, reaching nearly one out of every
four homes in the country. NBCU owns NBC, MSNBC, CNBC, Universal Studios, 27 television stations, and a host of other properties.
President Obama has promised that his administration would finally
begin enforcing antitrust laws to prevent unreasonable consolidation of
market power. If ever a media deal posed such a threat, this is it. The
merged Comcast would be to media what Goldman Sachs is to Wall Street:
"a great vampire squid wrapped around the face of humanity,
relentlessly jamming its blood funnel into anything that smells like
money," as Rolling Stone's Matt Taibbi once described the latter.
It should come as no surprise that Wall Street and Washington are
saying this is already a done deal: The media and telecommunications
industry is second only to drug companies in how much it spends
lobbying Washington. Its army of PR firms, lobbyists and sock-puppet
think tanks is already blitzing the press corps and Capitol Hill. It's
readying Comcast CEO Brian Roberts for his close-up as a new media mogul and neglecting to mention the impact of this deal on everyday people.
Comcast has raised cable rates for years while raking in record profits nearly every quarter. It is anti-union.
It cares nothing for independent, alternative programming. And if
you're a startup television channel, you can forget about getting a
spot in Comcast's lineup. Comcast will charge you far more for space on
its lineup than you could possibly pay. Just ask Al Gore about his
failed effort to get his Current TV a reasonable position in the cable
Let's not forget that Comcast is the company that was caught illegally blocking
peer-to-peer Internet downloads and then lying about it - earning a
smack-down from the FCC for breaking Net Neutrality rules. And the
company is known for blocking TV ads it didn't like. The company's track record of protecting the public's interest isn't exactly stellar.
And now, Comcast is set to control media across all distribution
platforms. The company is threatened by the increasing amount of free
content on the Net, and a public who is both watching entertainment on
the Internet, and creating their own.
NBC owns a major stake in Hulu, and Comcast likely wants to put the
video service and all NBC content behind a paywall. Comcast and other
cable companies are already putting the final touches on "TV
Everywhere," a paywall that requires a traditional cable subscription
to watch online content owned by these companies. Comcast's very
survival depends on remaining the gatekeeper between you and the
programs you want to watch, and it wants as little competition as
Worse still, if the Comcast-NBC merger is allowed to go through, it
will be the start of a catastrophic storm: a tidal wave of mega-deals
by other content giants like News Corp. and Disney merging with
distribution behemoths like Time Warner Cable and AT&T. In a nation
where 98 percent of Internet users have only one or two choices of
Internet service providers, we could witness a future in which a
handful of phone and cable companies, merged with a handful of content
companies, will put all premium content behind a paywall and make all
other content hard or impossible to find.
ISPs' content and applications -- and those of their partner
companies -- will move at light-speed, while the rest of the Internet
will seem like it's still on dial-up. The result: homogenized corporate
content, higher prices and fewer real alternatives so that distributors
can prevent the "market fragmentation" that advertisers loathe. Sound
familiar? The Internet will become the cable service of the 21st
century -- instead of the free and open arena for economic innovation,
democratic participation and free speech that it's been.
Some say that companies like Comcast are simply doing what they must
to prosper. But we need to ask whether boosting Comcast's bottom line
is worth the cost to the rest of us. Such market power could destroy
the promise of an open Internet and its unprecedented ability to
amplify independent voices, reinvent journalism, and inspire new forms
The deal is expected to take at least six months to finalize, and it
will possibly be more than a year for federal regulators to approve or
reject the deal. The warped Washington conventional wisdom says that
the deal is inevitable, but Free Press and our allies are rallying public opposition.
The Obama administration has sharply criticized the previous
administration's weak antitrust record and promised vigorous oversight
of anti-competitive deals -- particularly those involving vertical
mergers (like joining content and distribution companies) and
innovation-focused industries like the Internet.
This merger is another major test of whether President Obama plans to deliver on his promises.
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