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Comcast faces potential Justice probe at Sen. Blumenthal's urging

Comcast Corp. says it has behaved with NBCUniversal. But some fear what will happen when the government restraints are lifted in 2018.

Sen. Richard Blumenthal, D-Conn. holds a thumb drive during a news conference on Capitol Hill in Washington in February.
Sen. Richard Blumenthal, D-Conn. holds a thumb drive during a news conference on Capitol Hill in Washington in February.Read moreAndrew Harnik/AP

Sen. Richard Blumenthal (D., Conn.) has asked the Justice Department to open an investigation into Comcast Corp.'s seven-year-old acquisition of NBCUniversal, saying it could still harm consumers.

"You may need to consider separating Comcast and NBCU in order to fully restore competition," said Blumenthal, a member of the Senate Judiciary Subcommittee on Antitrust, Competition and Consumer Rights, in the Dec. 13 letter to Makan Delrahim, who heads Justice's Antitrust Division, which is suing to block the AT&T/Time Warner Inc. merger.

A Justice spokesman said the agency had received the letter and was reviewing it.

RCN, a Princeton-based cable and broadband provider whose network includes two million homes, also has approached the Justice Department and the Federal Communications Commission with concerns over Comcast/NBCUniversal's market power through its ownership of cable-TV distribution systems and an entertainment conglomerate, according to company officials and federal documents.

Conditions set by two federal agencies restrict Comcast's potentially anti-competitive behavior, and both agreements will expire in 2018. The FCC's conditions expire next month, while the Justice Department's consent decree ends in September, raising concerns that Comcast could hurt its pay-TV or streaming rivals by withholding must-see entertainment or news channels, or charging high prices for popular content and shows.

"No one wants to use government for additional regulation, but we need a level playing field," RCN chief executive Jim Holanda said Thursday. RCN, which lays wires on poles next to existing cable systems, competes with Comcast for pay-TV and broadband customers in about one million homes in its footprint.

Comcast holds tremendous bargaining power over RCN with its ownership of NBCUniversal, regional sports networks, local NBC broadcast-TV stations, and cable channels, Holanda said. Comcast can force the cost of RCN's service higher for RCN consumers while keeping costs down for Xfinity customers, he said.

Holanda believed that some of  Comcast's actions were "an antitrust suit waiting to happen." RCN has operations in the Philadelphia, Boston, Washington, and Chicago markets.

Comcast spokeswoman Sena Fitzmaurice said in a statement that "there is no credible basis to pursue an extension or modification of the consent decree or conditions."

Fitzmaurice added that the Justice Department has received substantial information about Comcast's compliance with the consent decree and "has never pursued any enforcement action against us. All of the market segments in which we do business are more robust and more competitive now than they were before our NBCUniversal transaction, including the explosive growth of online video distributors, which Comcast-NBCUniversal has significantly fostered through hundreds of [streaming service] content licenses, substantial broadband investment and expansion, and inclusion of [streaming services] like Netflix, YouTube, and Sling TV on our innovative X1 platform."

Delrahim, who was appointed by Trump to head Justice's Antitrust Division, has said he does not think consent decrees that restrain corporate behavior like the one imposed on Comcast in 2011 are effective over time, leading to his decision to sue to block the AT&T/Time Warner merger.