I think it’s time for me to reveal some of my personal opinions about the Comcast NBC Universal merger. I pay a considerable amount attention to media policy as part of my job, but I have some difficulty being objective about Comcast — a corporation I consider abhorrent in pretty much every way. Which is why I’ve been quiet on the subject of the merger.

I was also thinking through my justifications, which is always a worthwhile exercise. It’s good to understand the strengths and weaknesses of your suppositons in order to anticipate opposing arguments. As much fun as it can be to go off half-cocked, some subjects demand a greater amount of scrutiny.

I think I’m ready now.

Keep in mind that this is my own opinion — I’m not representing any organization or interest here. I’ve also tried to limit the amount of personal outrage in my analysis. My own experiences with Comcast have been consistently atrocious, and I know I’m not alone. That said, any references to Comcast’s singular incapability to provide a service as advertised are made only to reinforce the notion that the company would perhaps be better served to focus on its core competencies (or incompetencies, as it were) before expanding into new territories.

We’re gonna get into some light marketplace/policy history here, so if you wanna tune out, I don’t blame you. Those made of sturdier stuff will find more below the fold.

Am I against this merger?

In theory. I know that it’s probably surprising that I’m not out-and-out opposed to Comcast taking a controlling share in NBC, but there are a few reasons to consider why it might not be the end of the world. Still, I’ll start with the negatives.

Ignore for a moment Comcast’s inability to provide a decent product, and forget their propensity for deceptive pricing schemes that leave customers hemorrhaging cash and spending most of their free time on the phone (or Twitter) dealing with “customer service.” The fact is, Comcast’s network will suck regardless of whether or not the merger goes down. So let’s examine what this is really all about: brand extension, vertical integration and my favorite MarketThink buzzword, “synergy.”

Here’s where I quote an article by someone smarter than myself, namely Mark Cooper, director of research at the Consumer Federation of America:

The effort to dismiss concerns about the Comcast-NBC merger ignores the large size, prominent position and powerful incentives Comcast-NBC would have to abuse its power. Comcast is the largest cable operator in the United States, larger than the next three cable operators combined. Its holdings are concentrated in the major media markets. It is also the largest broadband Internet service provider and has a dominant market share in the local markets it serves.

NBC is one of four major national broadcast networks, “a global brand with an iconic legacy (news, sports and Primetime,” and a particularly prominent position in national and local news. Combining the broadcast network with the cable channels, Comcast-NBC would have ownership interests in almost a dozen of the video networks that “deliver mass-market audience with 100 percent reach of U.S. TV households.” There are only a few dozen such networks.

This Ars Technica article goes even further in showcasing just how large Comcast already is. Hell, they might even own this site. That would explain the electric shocks when I type something disparaging about the company.

Keep in mind that Comcast recently won a court appeal lifting a cap that restricts the number of subscribers any one cable company can amass. So they’re probably feeling cocky.

The problem in this instance isn’t about bigness, per se, but rather how Comcast’s influence as the nation’s largest internet and cable provider might, without strong net neutrality provisions, end up reshaping the web as we know it. Here’s Cooper again:

Comcast-NBC poses a unique threat because it is a dagger aimed at the heart of the Internet, a direct competitor to cable for multichannel video distribution. Allowing the largest cable and broadband service provider to buy one of the top four video programmers would create a huge incentive to lock content behind the new pay walls cable companies want to build.

Welcome to TV Everywhere — a deceptively named joint venture between Time Warner Cable and Comcast to put TV. . . on the internet! Which you can only watch if you’re already one of their cable subscribers. Keep in mind that, if Comcast merges with NBC, there are currently no regulatory policies in place to prevent Comcast from, say, refusing to allow Verizon access to its programming for terrestrial delivery. Meaning, potentially no MSNBC on Fios.

If you really want to go down the policy rabbit hole, you can check out this post by my associate, Kamilla Kovacs.

Now, allow me to play devil’s advocate.

I truly believe that merger efficencies are a market myth, particularly when it comes to content diversity. A scan of recent history provides no evidence of a major merger having resulted in more choice in the marketplace. Most recently, the combining of XM and Sirius has made a once-exciting mode of broadcasting the subscription version of terrestrial commercial radio, complete with the shitty commercials. But I digress. Comcast may very well be interested in investing in content. Let’s take their word for it for now.

It’s been brought to my attention that Comcast has done some investing in local sports, giving area games a platform where excitement can build, blah, blah blah. Since I work in music and spend a good deal of time bashing commercial radio for their utter disregard for localism, it’s an interesting thought experiment to imagine Comcast getting behind local bands or venues and helpting to generate some good-old-fashioned buzz. One can picture that the synergies could actually pay dividends here — if you were, say, watching a concert on your “smart TV,” you could click a link to buy tickets to the band’s performance in your area or a download of their album or the licensed stream of their catalog. Then there’s the “funnel up” phenomenon, where talent could be positioned to be cross-licensed across platforms — soundtracks, ad branding, you name it. A company like Comcast has the money to throw at schemes like this, and, if handled properly, it could theoretically result in a much-needed boost to a struggling sector. There is presently a void in investment in music, and perhaps Comcast could find a creative means to fill it.

I’m not ready to bank on those outcomes, though. More likely, the company will attempt to squeeze maximum value out of their holdings while limiting the amount of investment required. I mean, just look at the way they manage their infrastructure. The broadband duopoly leaves them free to gouge consumers while offering sub-par service — their ownership of NBC could simply mean more crappy Jay Leno and reality TV programming tucked behind pay walls.

One thing’s for sure, this merger will be a test of the administration’s Department of Justice. On the trail, Obama seemed to suggest that the era of deregulatory, merger-happy free-for-alls were at an end. We’ll see how much of the rhetoric stands in practice. The other agency to keep an eye on is the FCC, who are knee-deep in a Notice of Proposed Rulemaking on net neutrality. Then there’s the DC Circuit Court appeal of the Commission’s order against Comcast for their throttling of BitTorrent traffic — how that case is ultimately decided could affect outcomes across the board. Lots of moving pieces, in other words.

So, am I against this merger? Essentially. But part of me also wants to see Comcast become overleveraged and fail, like Clear Channel and all the other consolidation junkies selling free market mythologies to the highest bidder. If Comcast believes they can innovate in content, well, that’s their corporate prerogative. Again, I have a hard time seeing it. To me, the merger raises serious concerns about net neutrality, particularly as network operators and content providers alike attempt to monetize online delivery of entertainment and information. You wanna merge? Fine — the regulatory agencies will scrutinize your proposal. But one of the conditions should be that Comcast agrees to accept clear, enforceable rules for net neutrality.

We shall see.

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About the author

Casey Rae-Hunter
Casey Rae-Hunter is a musician, public policy wonk and the editor/publisher of The Contrarian Media. An in-demand speaker, he gives frequent talks at conferences and campuses on issues at the intersection of creativity, technology, policy and law, and is a go-to source for major media outlets from NPR to the New York Times. Casey works alongside leaders in the music, arts and performance sectors to bolster understanding of and engagement in key policy and technology issues, and has written dozens of articles on the impact of technology on the creative community. Casey is an adjunct professor at Georgetown University and the Deputy Director for Future of Music Coalition. He also serves on the Board of Directors of the Media & Democracy Coalition and the National Alliance for Media Arts and Culture. The Contrarian does not necessarily represent the views of the organizations to which he belongs.

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