Comcast-NBC U merger could hurt consumers

By Josh Silver and Tim Winter

After months of speculation and rumor, Comcast and NBC Universal have formally announced that they are getting hitched in one of the biggest media mergers in our nation's history. The country's largest cable company and residential broadband provider is poised to take a controlling stake in NBC's broadcast network, dozens of cable channels, 27 local television stations, a movie studio, and a long list of other holdings.

If this deal goes through as proposed, Comcast would control huge swaths of the cable, Internet, and content industries. It would be the first of a new generation of media behemoths, with more sure to follow.

What can consumers expect from this marriage? Higher prices for cable television and Internet access. Less local, diverse programming and independent media. More sensationalism and even fewer family-friendly content choices.

If you think you're already paying too much to watch TV or go online, if you care about open and unfettered Internet access, or if you worry about what your kids see, you have good reason to object to this wedding. And you'd better speak now or forever pay the price.

The merger would eliminate some of the critical competition that normally occurs among content distributors such as Comcast, content programmers such as NBC, and content producers such as Universal Studios. Instead of bargaining hard, a Comcast-NBC U behemoth would be likely to favor its own programming, squeezing more independent channels out of basic-cable tiers to make room for more Comcast-NBC content.

Moreover, a merged company would have the market power to gouge its competitors, pushing up prices for Verizon FiOS, DirecTV, the DISH Network, and smaller cable companies. In other words, a Comcast-NBC U merger could mean higher prices even for those who get their programming elsewhere.

And if Comcast gets control of NBC Universal's marquee content, it will have every incentive to move online video offerings behind a "pay wall," as it has already done with the online video product known as TV Everywhere. If you wanted to watch NBC Universal shows online, you might have to be a Comcast subscriber.

Comcast already makes consumers pay for hundreds of channels they don't want or need just so they can access the dozen or so channels they actually watch. After a merger, consumers could be unfairly forced to pay for more extra services just to get what they really want.

Worse, history suggests that a Comcast-NBC U deal would trigger a wave of mergers throughout the industry, as other distribution and content companies seek to match the new, consolidated threat. With diminishing competition, the danger of collusion and the likelihood of more anticompetitive behavior will only grow. Consumer choice will shrink further, and prices will rise even more. And more Americans will lose their jobs: When big companies merge, management's first task is usually sending out pink slips to save the stockholders money.

Runaway media consolidation has already harmed average citizens and shareholders alike. The further combination of content companies with the phone and cable giants, which already control 97 percent of the residential broadband market, would be disastrous.

Finally, media consolidation has been shown to coincide with an increase in violence and sexuality on television and radio. Large companies drowning in debt are more inclined to cater to the demands of Wall Street than to the needs of Main Street. Programming decisions become more centralized and less responsive to the needs of local communities. And bottom-line incentives encourage the production of cheap content that guarantees ratings through the shock appeal of sex, violence, and sensationalism.

The only winners in this merger will be the industry executives brokering the deal. On the losing side will be competition, innovative and independent media sources, and - most important - parents, families, and the public at large.

The proposed Comcast-NBC Universal merger is a public issue. Americans of all political stripes can agree on the need for robust competition, increased consumer choice, and more responsive community media. Federal regulators shouldn't bless this union. They should block it.