The Department of Justice is examining how the proposed $13.75 BILLION deal of Comcast acquiring NBC Universal from General Electric might adversely affect the blossoming Internet video market. There are fears that the new Comcast could potentially stunt the Internet video industry’s growth. The agency’s antitrust division is looking into whether or not Comcast could potentially control distribution rights to significant amounts of television programming on the Internet, which would effectively block potential competition.
Companies like Netflix and others are providing access to television programming and movies over the Internet which is encroaching on the traditional market of cable and satellite companies, which in turn are trying to fend off the competition by creating Internet-based distribution methods of their own. Current regulations require cable companies that own content (like Comcast) to make that programming available on reasonable terms to rivals.
DISH and DirecTV have added their 2-cents into the discussion by requesting that those regulations be extended to any Comcast/NBCU content that’s delivered over the Net. [Hmmm, do you think they fear that Comcast will be looking to make some content EXCLUSIVE to Internet distribution to bypass existing regulations?]
They are also looking closely at Comcast’s efforts to give its cable customers online access to some TV content that isn’t widely available online now, and how that might affect access to those programs by other Internet providers. That might result in fewer competitors over time so that consumers would end up paying more for video in general. [LOL,,,if WALMART can do it and get away with it, why not COMCAST?]
“The success of the online-video-business model depends critically on access to online content, and strict conditions on the transaction would be necessary to thwart” any attempts by Comcast-NBCU to block access, Dish wrote in a complaint to the FCC detailing its support for broadening the existing regulations.
Comcast’s response to the complaint: “Online video is not a substitute” for multichannel video programming. “In addition, several impediments – technological, pricing related, and rights related – make it highly unlikely that online video will become a substitute” for such service “in the foreseeable future.” [...so let us just SQUASH it before it does and we'll be doing you a favor too]
Although the transaction is expected to be approved late this year or early in 2011, the government does have some leverage and it could impose conditions particularly because of the FCCs involvement which has broader authority to act to stop anything that it deems to be against the public interest.Regardless of the outcome of this deal, the DOJ & FCC will most likely continue to investigate whether cable operators are acting to thwart emerging competition from the Web. If so, they could file a suit under the Sherman Antitrust Act for anti-competitive behavior. [...in which case they will pay what seem to be a hefty fine but will only amount to a drop in the bucket compared to the stolen revenues and lost opportunity cost for Internet Video companies that could have been great if only they had a fighting chance]