Comcast Merger Chances Stall As Regulators Realize Comcast Meddled In Hulu Management, Ignored NBC Deal Conditions
from the you-made-your-bed dept
Reports have started to emerge that regulators at the Justice Department may block Comcast's proposed $45 billion acquisition of Time Warner Cable, with DOJ attorneys crossing the t's and dotting the i's before recommending a deal rejection. Comcast is apparently meeting with the DOJ this week as part of a last-ditch effort to save the deal, though leaks have suggested Comcast may walk away from the deal entirely if the merger conditions are too steep (read: actually have them do much of anything for the public interest), including requiring that Comcast sign off on Title II reclassification and the FCC's new net neutrality rules.Apparently one of the sticking points for regulators during the review was their realization that Comcast failed to adhere to most of the conditions attached to its 2011 acquisition of NBC Universal. It's worth noting that Comcast volunteered most of the conditions attached to that deal. Even then the cable giant failed to adhere to many of them; such as the requirement that they offer and clearly advertise a 6 Mbps, $50 broadband tier for at least three years. An FCC investigation found that the company made the tier difficult to find and sign up for, so Comcast was fined the inconsequential sum of $800,000 for its behavior.
New leaked reports suggest that the DOJ was particularly ruffled by the fact that Comcast ignored NBC deal conditions related to Hulu, which Comcast acquired as part of the deal. Co-owned with Disney and 21st Century Fox, Comcast was restricted from playing a managerial role in the company for fear it would hinder the service's chances at being a truly disruptive Internet video competitor. But DOJ lawyers apparently found that Comcast largely ignored those restrictions, playing a starring role in scuttling the sale of Hulu, out of fear that it would become a more viable competitor to Comcast's services:
"Yet Comcast’s assurances at the Sun Valley meeting played a significant role in how its co-owners evaluated the sale process, people familiar with the other owners’ thinking said. Comcast told its partners it would help make Hulu the nationwide streaming video platform for the cable TV industry, which would boost the site’s growth and make it a stronger rival to Netflix. That influenced Disney and Fox’s decision to call off the sale when the conference was ending, people familiar with those companies’ thinking said. Among the top bidders for Hulu were Comcast rivals DirecTV and AT&T Inc."We've long noted how Hulu's owners were so afraid of Hulu being truly disruptive, they've hamstrung the service at every opportunity. As such, it's long been little more than a glorified ad for traditional television, with incomplete catalogs and a preponderance of "clips" presented in such a way as to intentionally drive users back to legacy cable. Comcast's involvement post NBC deal certainly helps explain how, despite some executive decisions, the service remains in that role to this day.
It's notably amusing that Disney and Fox actually believed Comcast when it claimed it actually wanted to build Hulu into a Netflix competitor -- by shackling it to the walled-garden mindset of the cable industry. Just as amusing is that Comcast has tried to claim that Hulu is part of a "fierce competitive landscape" that will keep the company in check should regulators approve its acquisition of Time Warner Cable. In other words, Comcast is arguing that a company it intentionally sabotaged to keep from being competitive is a perfect example of the kind of competition that can keep Comcast honest moving forward.
It's possible regulators may still approve the deal, but it seems increasingly likely that if Comcast wants the deal to go through, they may have to sign off on some conditions that are more than just paper mache simulacrum.
![Hide This Hide this](https://ii.techdirt.com/s/t/i/topclose.png)
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: doj, merger
Companies: comcast, hulu, time warner cable
Reader Comments
The First Word
“Just turn the spotlight
If/when the Comcast-Time Warner merger goes through evidence like this will provide the justification to assume their success was due to government corruption.At that point it might be useful to turn the spotlight from Comcast and onto those government officials who approved the merger.
So go ahead DoJ, FTC and all you other alphabet agency leaders, give Comcast the green light and make yourselves the new target of legal scrutiny.
Subscribe: RSS
View by: Time | Thread
Looks as though Comcast will have to dig deep into their pockets to throw a few lavish parties and shower gifts to the DOJ to get them to rule in their favour!
[ link to this | view in thread ]
Re:
[ link to this | view in thread ]
So Comcast will walk away from the deal If the merger conditions are too steep?
OMG the merger is a lock
[ link to this | view in thread ]
Foolish
There's a word for someone who will enter into an agreement with someone who has a history of not adhering to agreements: "mark".
[ link to this | view in thread ]
"We own Hulu"
It perfectly illustrates why Comcast should not be able to buy TW and why they shouldn't have been able to buy NBC.
[ link to this | view in thread ]
Just turn the spotlight
At that point it might be useful to turn the spotlight from Comcast and onto those government officials who approved the merger.
So go ahead DoJ, FTC and all you other alphabet agency leaders, give Comcast the green light and make yourselves the new target of legal scrutiny.
[ link to this | view in thread ]
Re: Just turn the spotlight
[ link to this | view in thread ]
chicanery and subterfuge
[ link to this | view in thread ]
[ link to this | view in thread ]
[ link to this | view in thread ]
Another investigation
[ link to this | view in thread ]
Nullify the sale of NBC to Comcast. No refund. No further acquisitions until and unless they clean up their act.
Oh, but that wouldn't be profitable for politicians that support them in exchange for contributions, guaranteed C-level executive appointments after retirement (getting paid a 7-8 figure salary to play golf with your political friends and make deals for favors all day is such a blast), or if you're cheap then straight up cash and hookers.
[ link to this | view in thread ]
Re: "We own Hulu"
[ link to this | view in thread ]
Re:
More like they didn't "dig deep into their pockets to throw a few lavish parties and shower gifts to the DOJ", so now they lose.
Yeah, I'm cynical. Sue me.
[ link to this | view in thread ]
Re:
Have you noticed, politicos don't offer performance guarantees? Chris Dodd lambasted them for this a couple of years ago. The money continues to flow, so I guess they've decided to throw him a bone to keep it coming.
Poor Chris Dodd. I mean, he has no control over congresscritters. Why's this his fault? Boo hoo, weep, weep, weep.
[ link to this | view in thread ]
What?
[ link to this | view in thread ]
COME ON
[ link to this | view in thread ]
Re: COME ON
"A million here, a million there; pretty soon you're talking about real money." Jeebus.
[ link to this | view in thread ]
Re: Re: COME ON
[ link to this | view in thread ]
Let's get some perspective. Comcast made $6,816,000,000 in 2013; an $800,000 fine is 0.01174% which would translate to $6.09 if you were an American raking in the median $51,915 in 2013. Or you were a poor millionaire at the bottom of the 99% percentile it'd be $61.53 of your annual $525,000. I've had Comcast Bills that are lower...(ba dum tss) And that was just their revenue, we're off by a factor of ten from gross income apples to apples.
Or how about this specific infraction, not 'advertising' reasonable internet-only packages. Every time I looked it was around $20 more for Internet without TV; and I actually looked. It obviously didn't effect all their customers, but again the scale is tremendous. Lets call the overcharge $10 (half my observed $20) a month for three years. If 2,200 customers were over charged $360, this fine actually dinged Comcast $8,000. What are the odds more than .01% of Comcast's 22,000,000 subscribers wanted to buy Naked Internet? You bet you ass Comcast's accountants know, but we never will because they just tossed the watchdogs a nickle to stop looking.
[ link to this | view in thread ]