Comcast Applauds Itself For Barely Adhering To NBC Merger Conditions, Most Of Which Comcast Created

from the regulatory-theatrics dept

Thu, Mar 6th 2014 8:28am — Karl Bode

As Comcast pushes for regulatory approval of its next major merger (the acquisition of Time Warner Cable), the company is pointing to its last major merger (the acquisition of NBC Universal) as an example of how tough regulators and meaningful merger conditions will keep the company honest as it grows ever larger. In an FCC filing (pdf) the cable giant pats itself on the back for over-delivering when it comes to meeting conditions placed upon the company after acquiring NBC. According to Comcast, it's "simply indisputable that we have honored – in fact, over-delivered – on our commitments."

The catch? Comcast created most of the NBC merger conditions itself, knowing full well it would meet them during the ordinary course of doing business. Still, in many cases even those conditions proved to be too much for the company.

Most of the NBC conditions involved promising modest broadband coverage goals by certain dates, goals the company was already on the cusp of completing (or in some cases had already completed) anyway. Other merger conditions, like offering $10, 1.5 Mbps broadband to families that qualify for the National School Lunch Program (you can't owe Comcast money -- which the poor usually do, and can't have existing Comcast broadband service), was something Comcast planned to offer much earlier but withheld to get the FCC to sign off on the deal. Comcast's "over delivery" on that condition resulted in protests on the streets of its home town of Philadelphia by people who claimed the option had too many restrictions and was intentionally designed to be difficult to sign up for (the company has since bumped the speed to 5 Mbps and extended the length of the offer indefinitely to help ease the Time Warner Cable deal).

Another vague condition prohibited Comcast from discriminating against channels that compete with its own content. Comcast struggled do that as well -- the FCC had to scold Comcast for holding Bloomberg news away from core news channels so it wouldn't hurt Comcast's CNBC (when singled out the company tried, unsuccessfully, to claim its First Amendment rights were being attacked). Another core "tough" condition Comcast cites as example of its over achievement was the promise to offer a 6 Mbps standalone broadband tier for $50 for a few years. From the filing:

"Requirement to provide BIAS on a standalone basis and to offer a new 6 Mbps down service at no more than $49.95 per month: Comcast continues to offer, on a standalone basis and at reasonable prices, any tiers of BIAS that it offers on a bundled or multi-product basis. Comcast also offers its “Performance Starter” tier, a 6 Mbps down standalone BIAS service, priced at $49.95 per month. Pursuant to the Broadband Consent Decree entered into with the Commission on June 27, 2012, Comcast will continue to offer Performance Starter at least through February 21, 2015."

Offering 6 Mbps for $50 is already pretty unimpressive on its face, but becomes even less impressive when you learn that the FCC had to fine Comcast $800 million (while extending the condition) because Comcast hid the option for consumers. Think about that: offering a paltry speed at a high price was too difficult to achieve, yet Comcast would like you to know it's an over achiever. After extending the condition, the FCC patted itself on the back for being so damn good at protecting consumers:

"The unprecedented merger condition extension, significant voluntary contribution, and robust compliance plan send a clear message to the American public and the communications industry that the FCC will vigorously enforce its merger conditions, to the ultimate benefit of consumers."

The message that FCC warning actually sent was that the government is historically only engaged in theater when it comes to most merger conditions. All too often, the "tough" conditions are either volunteered by the target company (because they're easy to meet or even already met), they're specifically designed to be meaningless (as we saw with AT&T's acquisition of BellSouth in 2006), they're conditions prohibiting the company from doing something it would never in a million years do (like block websites outright), or they are very selectively enforced. Like the FCC's dedication to broadband competition, the majority of merger conditions are simply a stage play put on for consumers and consumer advocates.

What does it say when you can't even meet merger conditions intended to be largely theatrical in nature? What does it say when you have trouble meeting merger conditions you yourself proposed? Clearly it says you're a fantastic, immensely-trustworthy overachiever.

This obviously raises the question of what conditions Comcast will urge regulators to impose on its acquisition of Time Warner Cable. Top Comcast lobbyist David Cohen appears to be pushing the promise that Comcast will spin off about three million of the acquired subscribers to form a new cable company. Comcast already expected to have to divest around three million of the acquired customers to another company like Charter (while keeping around 8 million), but spinning those three million users off into a new company would be more tax efficient. That new company wouldn't compete with Comcast, but you can expect that condition to be presented as Comcast being "forced" to improve market competition.

I'd expect the FCC to approve this merger, given deals have to be a unique, skull-rattling type of obviously awful and see unprecedented public outcry (read: AT&T T-Mobile) to prompt the FCC to action. Comcast doesn't directly compete with Time Warner Cable, and both the FCC and Comcast will paint legitimate worries about vertical integration, monopsony power, scale and content leverage as theoretical in nature. Such nuanced concerns are simply easier to take the bullshit bulldozer to in the media. As such, it's not clear what new, meaningless conditions Comcast and the FCC are currently cooking up to pretend to protect consumers from a larger, more powerful Comcast. Perhaps the company should be required to water the office plants? Strict oxygen inhalation and exhalation requirements? The options are limitless.

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Filed Under: fcc, merger, regulation
Companies: comcast, nbc

18 Comments

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John Fenderson (profile), 6 Mar 2014 @ 8:43am

BIAS?
" Comcast also offers its �Performance Starter� tier, a 6 Mbps down standalone BIAS service, priced at $49.95 per month."

That's fascinating. I hadn't heard of this tier at all, despite a number of calls to Comcast in a failed attempt to get internet service at not-insane prices.

They've hid this quite well!
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- JBDragon, 6 Mar 2014 @ 2:50pm
  
  Re: BIAS?
  I have U-Verse and it was cheap the first year for my 18 Mbps plan, then it expired and jumped up to like $58 a month. I just called and got another year for $30.50 a month. So that's pretty reasonable. Upload speed is not the greatest, but generally not a issue. I don't pay for TV service, I threw up a Antenna for that. With a Antenna and the Internet, I can pretty much see anything anyway!!!
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- ltlw0lf (profile), 6 Mar 2014 @ 3:05pm
  
  Re: BIAS?
  That's fascinating. I hadn't heard of this tier at all, despite a number of calls to Comcast in a failed attempt to get internet service at not-insane prices.
  
  I am really, really confused. I pay $73 a month for 50 Mbps down. Either their 6 Mbps @ $50 a month includes all you can eat Cocaine and prostitutes, or their upper tiers are at insane prices.
  
  And I thought I was getting ripped off.
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  - John Fenderson (profile), 6 Mar 2014 @ 7:58pm
    
    Re: Re: BIAS?
    Yes, true. My eyes were filled with hope that I could avoid getting reamed by Comcast, but alas, it is not to be.
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Anonymous Coward, 6 Mar 2014 @ 8:51am

Comcast is completely corrupt and incompetent. They guaranteed me a certain price for 2 years but then 6 months later they raised it. Called them on it and they basically said, "Sorry, Someone lied to you and we won't be giving you your money back." Unfortunately it was word of mouth so I can't back it up. I would drop them in a heartbeat but I can't change as there isn't another service provider that supports my area with the speeds I need. Whatever conditions they may have created or required to follow will be broken or have some loop hole to raise the price. The interesting thing is I was offered that 6Mbps package for $50.
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Alien Rebel (profile), 6 Mar 2014 @ 9:11am

No Risk of Hypoxia
. . strict oxygen inhalation and exhalation requirements?

Many bottom-dwelling creatures need very little, if any oxygen. Of course, COMCAST agreeing to pointless do-nothing stipulations for the sake of appearance would be entirely out of character. Yup.
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Anonymous Coward, 6 Mar 2014 @ 9:19am

The FCC will gladly kneel down in front of comcast , hookers usually do what they're paid to do.
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Anonymous Coward, 6 Mar 2014 @ 9:47am

And then there is this story........

NBC is coming down like a hammer on celebs who want to get on Jimmy Fallon's show ... if they dare do a show on CBS or ABC ... they can forget about "The Tonight Show."

Sources connected to CBS, NBC and ABC tell TMZ ... the Peacock network believes Jimmy Fallon's ratings success gives them extreme bargaining power. They put the word out to celebs, agents and publicists ... if they want to be on Fallon they can't appear on ANY other network ... and not just shows that go head-to-head with Jimmy, but morning shows as well.

We're told NBC is saying the stars who go on Fallon are also allowed to appear on "Today," "Dateline" and any similar shows they air, but that's it.

A GMA source tells TMZ ... they've already gotten fallout from people they were trying to book.

Fallon is dominating late night .... crushing Jimmy Kimmel by bringing in more than twice the number of viewers.

Read more: http://www.tmz.com/2014/03/06/jimmy-fallon-nbc-jimmy-kimmel-live-tonight-show/#ixzz2vCpRrGP4
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Anonymous Coward, 6 Mar 2014 @ 10:14am

I can't believe how hard Comcast makes it for poor school children to have affordable internet. In some cases requiring these children to go without internet for 3 straight months, before accepting them on the School Lunch Internet program.

Comcast is a wolf in sheep's clothing. It's only going to get worse once Comcast owns over 90% of the land-line ISP monopoly. They already own over 60% of it.

It's time to classify them as a public utility monopoly, and regulate them as such.
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- John Fenderson (profile), 6 Mar 2014 @ 10:33am
  
  Re:
  It's time to just nationalize the physical infrastructure entirely and open it up to to however many service providers are interested in providing service over those wires.
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  - Alien Rebel (profile), 6 Mar 2014 @ 1:05pm
    
    Re: Re:
    I have no doubt there's a certain social strata that thinks the interstate highway system was the greatest error and calamity in world history. Think of all those people using something of value without anyone being allowed to collect (extort) fair market value!!!!
    
    I can't imagine our corporate overlords ever letting THAT happen again.
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    - Anonymous Coward, 6 Mar 2014 @ 1:23pm
      
      Re: Re: Re:
      They already do extract monopoly rents. Taxi cab monopolies increase the cost of transportation. With all the mergers there are only a few gas providers and so gas is overpriced. Purchasing and maintaining a car is overpriced thanks to everything being proprietary due to IP laws (you used to be able to fix your own car ... now you need all this proprietary and overpriced equipment) and everything obvious on a car is patented no matter how silly the patent is.
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      - Anonymous Coward, 6 Mar 2014 @ 1:28pm
        
        Re: Re: Re: Re:
        Not to mention you still pay for those roads with your taxpayer money. Face it, America is nothing but a big monopolistic bully.
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      - Alien Rebel (profile), 6 Mar 2014 @ 2:22pm
        
        Re: Re: Re: Re:
        Nope, you're describing relatively small-dollar secondary expenses that do not come anywhere near the real profit potential. I'm talking direct usage fees. Imagine, if you will, if COMCAST was able to buy up most of the highways in the U.S. There are only COMCAST cars for sale in your locality; you're forced into a long-term contract; you are restricted by mileage caps with big overage penalties; maybe there's an end to "roadway" neutrality, where if COMCAST doesn't like you, the stoplights are double the wait unless you pay up. What if they only built roads to the commercial establishments they owned?
        
        I'm talking a cats-and-dogs-living-together, wrath-of-God monopoly that could generate profits several orders of magnitude above what is being skimmed from our current public highway system. Public utilities? A huge mistake that some have probably never stopped crying over.
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      - Anonymous Coward, 5 Jun 2014 @ 5:53pm
        
        Re: Re: Re: Re:
        and lets not forget about these new toll roads.
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    - ltlw0lf (profile), 6 Mar 2014 @ 3:14pm
      
      Re: Re: Re:
      Think of all those people using something of value without anyone being allowed to collect (extort) fair market value!!!!
      
      Theoretically, we do pay for it, in the form of gasoline taxes and state licensing fees.
      
      But then again, we also paid for national broadband, a number of times.
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Anonymous Coward, 6 Mar 2014 @ 12:33pm

Don't forget about their low customer service ratings

http://en.wikipedia.org/wiki/Criticism_of_Comcast#Low_customer_satisfaction_levels
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- Anonymous Coward, 6 Mar 2014 @ 12:37pm
  
  Re:
  (and the article does state that they have made some improvements but they're still bad. Going from really bad to only slightly less bad is not enough to justify the approval of this merger).
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