The Comcast merger: higher prices, fewer choices, less innovation

Members of the Philadelphia Digital Justice Campaign are concerned about the potential merger between Comcast and NBC-Universal. And you should be, too. Here's why:

If the FCC approves the deal, it is obvious that consumers will end up paying higher fees for both content and access to programming. The cable giant already raises fees every few months, as it is!

In addition, Comcast would have unprecedented control over what programming we are able to watch and how we can watch it. The company could easily squash online TV like Netflix, Miro and iTunes.

Finally, if the merger goes through, Comcast will have an incentive to promote NBC shows over local or independent programming. This will make it even tougher to find alternative voices on cable.

Another thing to consider is the role Comcast could be playing in blocking the city from obtaining millions of dollars in broadband stimulus funds. Why would Comcast care? Because the funds would help pay for Philadelphia to build a publicly owned broadband network that would, eventually, offer residents affordable and reliable Internet access. The Inquirer's Joseph DiStefano wrote about the issue earlier this month:

http://www.philly.com/philly/business/technology/Why_didnt_PA_back_Phill...

The Philadelphia Digital Justice Campaign is starting to strategize around these issues. Hope you'll join us. Stay tuned for details.

What?

There are legitimate concerns about this merger but this post makes no sense.

it is obvious that consumers will end up paying higher fees for both content and access to programming

This isn't obvious to me. Comcast still has to deal with the same competition in it's markets (FIOS, broadcast, sattelite). What gives them carte blanche to raise fees due to this merger?

The company could easily squash online TV like Netflix, Miro and iTunes.

How and why? Again, there is nothing obvious about this. You also didn't mention Hulu, which NBC is a main partner in. Maybe Comcast will put more content online as a result of this merger, or allow us to watch the cable channels we already pay for in more ways than we can now.

And about the broadband funding: that is really f'd up but has nothing to do with the merger with NBC.

If you are serious about trying to block this merger I hope you put together a coherent position paper first.

Comcast would have unprecedented control over what programming we are able to watch and how we can watch it.

Bingo. This is the real (and only) political issue with this merger. This is why we need net neutrality and maybe something similar for television, although I fear that ship has already sailed.

The Dangers of this Merger are Numbered

According to Josh Silver of Free Press, a media policy think tank and advocacy group, the core problems are as follows:

1. The merger would eliminate the hard bargaining for distribution and content that normally occurs between distributors (like Comcast) and content producers (like NBC). That competitive bargaining will only intensify as more video is distributed over the Internet in the coming years.

2. The Comcast-NBC behemoth would control several distribution platforms -- a major television network, the largest cable company and the largest Internet service provider. The merged company will have strong incentives and the market power to discriminate in granting access to its wealth of programming. It will have the incentive and market power to enforce anticompetitive "bundling" and price-gouge other cable companies, especially smaller cable companies.

3. As the largest cable company and Internet service provider, Comcast will have the motive to move NBC's video content behind a pay wall that will mean higher costs for consumers, and it would stunt the growth of the Internet as an alternative medium for video service. Placing video content behind a pay wall that is only available to Comcast cable customers is a classic example of "anticompetitive bundling." That is, consumers who want Internet access to NBC programming will be forced to buy the bundle of cable and Internet.

4. Perhaps the most dangerous risk of this deal -- and one we have seen many times in years -past - is that it will trigger a "merger wave" throughout the industry as distribution companies and content companies seek to "muscle up" to match the new threat that the vertically integrated Comcast poses. Consumer choice will be restricted and prices will rise. With diminishing competition, the likelihood of similar behavior by other companies grows stronger, as does the threat of collusion among competitors.

Read more at Huffington Post

Finally with regard to broadband and federal funding this is an issue that should deeply concern the people of this city and the YPP community. Comcast is making the legal argument that as long as they provide Internet service in a geographic area, they will attempt to legally block federal or state funding that aims to bridge the digital divide. Their argument is that in areas where they serve, there are no unserved or underserved communities (read: no digital divide). Of course this is bogus because Philadelphia, the city of Comcast's home office, has one of the highest rates of digital exclusion, which is no surprise because digital exclusion co-occcurs with poverty.

The point here is not that Comcast is wrong, which is obvious. The point is that they are a bad corporate citizen. They get tax breaks and untold benefits by the municipality and commonwealth and then they attempt to block federal money from coming to this city to solve serious problem, which will have a great deal to do with how Philadelphia greets the 21st century. And while it is a bit of a stretch, the merger is a part of this equation because Comcast already wields far too much power in this city and the merger only promises to give them more power in setting the agenda of this region. On this one last point. When we were putting together the City's proposal for stimulus funding for digital inclusion, Comcast was there in the room. They were there when they were not in the room, and when decisions were made that they did not like, they were there in the room none of us get to be in, setting the terms of the debate. That is a fact.

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