Just FYI… This Thursday, February 4th at 9:30 am, the House Commerce Committee Subcommittee on Communications, Technology, and the Internet will hold a hearing titled, “An Examination of the Proposed Combination of Comcast and NBC Universal.” It will be held in 2123 Rayburn House Office Building and the Committee members were kind enough to ask me to come up and say a few words. Here’s the witness list:
- Brian L. Roberts, Chairman and CEO, Comcast Corporation
- Jeff Zucker, President and CEO, NBC Universal
- Colleen Abdoulah, President and CEO, WOW! Internet, Cable, and Phone
- Mark Cooper, Ph.D., Director of Research, Consumer Federation of America
- Michael J. Fiorile, President and COO, The Dispatch Printing Company, Chair of the NBC Affiliates Board
- Adam D. Thierer, President, Progress and Freedom Foundation
For those interested, the hearing will be webcast at www.energycommerce.house.gov. There’s also another hearing Thursday on the same issue over in the Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights. It’s titled, “The Comcast/NBC Universal Merger: What Does the Future Hold for Competition and Consumers?” and it will take place in the Dirksen Senate Office Building, Room 226 at 2:30 p.m.
Incidentally, I wrote a paper back about the proposed deal back in December entitled, “A Brief History of Media Merger Hysteria: From AOL-Time Warner to Comcast-NBC” as well as this editorial for Forbes.
At the “State of the Net” conference this morning, Alan Murray of The Wall Street Journal interviewed Brian Roberts, Chairman & CEO of Comcast. Here are some highlights. [You can follow all of my live Tweeting at: @AdamThierer]
- Stresses synergies from combination of Comcast cable channels & NBC broadcast properties (ex: Golf Channel & NBC Sports)
- Program access rules “should give fair amount of comfort” to critics who fear that content will be withheld
- “Businesses have to transform & reinvent themselves all the time” NBC part of that transformation for Comcast
- Internet is more friend than foe; broadband has transformed the business for the better
- Businesses grappling w/ ways to extend traditional services to consumers in new ways & still make $$$ (ex: TV Everywhere)
A funny thing happened to the FCC Friday on its way to regulating the Internet: a federal appeals court panel questioned the agency’s authority to regulate the web. There’s no final decision yet, but an adverse ruling could stop the agency’s Internet regulation plans in their tracks. And for good reason.
In proposing new neutrality rules last October, the FCC one rather inconvenient obstacle: there isn’t anything in the Communications Act, or any other statute, actually giving them power to regulate such things. Internet service, by the FCC’s own reckoning, is not a telecommunications service, nor is it cable TV, or broadcasting, or anything else the law give the FCC authority to regulate. Continue reading →
As I pointed out here before (see, “And so the Comcast-NBC Merger Hysteria Begins: Help Me Document It!“), every time a media merger is proposed we hear all sorts of silly Chicken Little predictions of impending doom as well as preposterous conspiracy theories about supposed nefarious schemes to take over the media universe and control our minds. For good measure, there’s also plenty of talk of “the death of deliberative democracy,” or efforts to weed out one sort of perspective or another.
As history has shown, it’s all complete bunk. But that doesn’t stop critics from concocting asinine theories about media providers seeking to “silence critics.” Here’s two bits of Chicken Little-ism that I missed in my previous essay documenting this silliness. First, over at Huffington Post, Marvin Ammori tells us that America is about to become Italy or Argentina because of the deal:
Putting so much power in the hands of one company–and, specifically, its executives–is dangerous for a democracy. There is a reason why autocratic regimes control the media–media shape public opinion and define what is “possible” in politics. We have seen the problem of private media consolidation in many countries. In Italy, Silvio Berlusconi used his massive media empire to win elections and is now Prime Minister (Italy’s longest serving ever). In Argentina, the government had to pass a media consolidation law because of the power of one media company that happens to be far smaller than a combined Comcast-NBCU.
And then we have Wade Norris writing about the deal over at the Daily Kos, saying: “If you don’t want to see the progressive voices on MSNBC silenced, then join the ‘no merger’ petition.” Ah yes, another automated “stuff-the-online-complaint-ballot-box” petition. I love those gimmicks. But ignore fake complaints for a moment and focus on the accusations at hand here. The Ammori-Norris theory is: If Comcast and NBCU are allowed to marry (a) progressive voices will be driven off their platforms and (b) Silvio Berlusconi will take over America democracy will somehow suffer. Is there really any truth to this? Continue reading →
Three months ago, when the DC Circuit struck down the FCC’s “Cable Cap”—which prevented any one cable company from serving more than 30% of US households out of fear that he larger cable companies would use their “gatekeeper” power to restrict programming—the New York Times
bemoaned the decision:
The problem with the cap is not that it is too onerous, but that it is not demanding enough.
Even with the cap — and satellite television — there is a disturbing lack of price competition. The cable companies have resisted letting customers choose, a la carte, the channels they actually watch….
[The FCC] needs to ensure that customers have an array of choices among cable providers, and that there is real competition on price and program offerings.
Perhaps the
Times‘ editors should have consulted with the Lead Technology Writer of their excellent BITS blog. Nick Bilton might have told him the truth: “Cable Freedom Is a Click Away.” That’s the title of his excellent survey of devices and services (Hulu, Boxee, iTunes, Joost, YouTube, etc.) that allow users to get cable television programming without a cable subscription.
Nick explains that consumers can “cut the video cord” and still find much, if not all, their favorite cable programming—as well as the vast offerings of online video—without a hefty monthly subscription. (Adam recently described how Clicker.com is essentially TV guide for the increasing cornucopia of Internet video.) This makes the 1992 Cable Act’s requirement that the FCC impose a cable cap nothing more than the vestige of a bygone era of platform scarcity, predating not just the Internet, but also competing subscription services offered by satellite and telcos over fiber. That’s precisely what we argued in PFF’s amicus brief to the DC Circuit a year ago, and largely why the court ultimately struck down the cap.
Bilton notes that “this isn’t as easy as just plugging a computer into a monitor, sitting back and watching a movie. There’s definitely a slight learning curve.” But, as he describes, cutting the cord isn’t rocket science. If getting used to using a wireless mouse is the thing that most keeps consumers “enslaved” to the cable “gatekeepers” the FCC frets so much about, what’s the big deal? Does government really need to set aside the property and free speech rights of cable operators to run their own networks just because some people may not be as quick to dump cable as Bilton? Is the lag time between early adopters and mainstream really such a problem that we would risk maintaining outdated systems of architectural censorship (Chris Yoo’s brilliant term) that give government control over speech in countless subtle and indirect ways? Continue reading →
Today, Jim Harper and I took on Andy Schwartzman of Media Access Projects and Gigi Sohn of Public Knowledge in this New York Times online debate about, “Should Consumers Fear the Comcast Deal?” Like other media critics, Schwartzman and Sohn adopt the gloom and doom tone that many worrywarts use when discussing the deal. Andy Schwartzman says “Comcast’s proposed acquisition of NBC Universal poses a genuine threat to free expression and diversity of speech in our democratic society.” And Gigi Sohn predicts that “With all that programming under its control, Comcast will have every incentive to take its shows off of the Internet and force consumers to buy a cable subscription to get online access to that programming.”
But as Jim Harper and I point out, we’ve heard such Chicken Little horror stories before. Whether it was AOL-Time Warner, News Corp-DirecTV, Sirius-XM, or whatever else, the story is always that a veritable media apocalypse awaits if the deals aren’t blocked. But it just ain’t so. As I note in my response:
Back in the real world, the sky never fell — except on the merging companies! Just two years after the deal was announced, AOL-Time Warner had lost over $100 billion and Time Warner has now spun off AOL entirely. The News Corp.-DirecTV marriage ended in divorce after just three years. And Sirius-XM flirted with bankruptcy earlier this year as listeners continue to flock to other audio options. The moral of the story: markets worked. Shareholders abandoned bad deals, new niche markets developed, and innovative digital technologies continue to revolutionize media.
And as Harper notes in response to silly claims about restricting access to content or communications, “Comcast-NBC can no more impinge on communications among Internet users than AOL-Time Warner did.” Which is to say, not at all. They would be doomed if they tried to play such games. You can’t make money or retain viewers or customers by cutting off access to content or conduit. Finally, “the genuine threat to free expression and diversity of speech” is not Comcast-NBC, as Schwartman suggests, but a government big enough to crush media companies and control media platforms as if they were their playthings.
For more details about the actual historical record, check out my recent PFF white paper: “A Brief History of Media Merger Hysteria: From AOL-Time Warner to Comcast-NBC.”
As I noted in my recent paper, “A Brief History of Media Merger Hysteria: From AOL-Time Warner to Comcast-NBC,” every time a media merger is proposed we hear all sorts of silly Chicken Little predictions of impending doom. Among the more entertaining claims we hear are conspiracy theories about supposed nefarious schemes to take over the media universe and control our minds, predictions of the death of journalism or democracy, or just good ol’ fashion screw-the-consumer price hikes. But, as I showed in my paper, those predictions have always proven to be bunk once the historical record is in–which usually only takes a few years. While most media mergers do end in misery–it’s for the merging firms and their shareholders, not the public. Unforeseen technological innovations and expanding media marketplace options typically doom most media mergers, while the viewing and listening public enjoys the fruits of continued marketplace evolution.
But the critics never acknowledge any of this. And, sadly, history repeats. The media worrywarts just keep mouthing the same lines and conveniently avoid any reference to their past predictions. No one bothers looking back and trying to match up those past predictions with present day facts. I’m out to change that. I am going to attempt to keep a running inventory all the Chicken Little predictions about the Comcast-NBC Universal deal so that, a few years from now, we can look back and see how well those predictions match up with reality. I suspect that, as was true of those earlier case studies, reality will look quite different than the rhetoric we are hearing today.
To kick things off, here are some rather outlandish comments from someone who should know better — Dan Gillmor, author of the excellent 2006 book,
We the Media: Grassroots Journalism by the People, for the People, which I have cited quite favorably in much of my own work through the years. But when it comes to the Comcast-NBCU deal, Gillmor has gone off the deep end in an essay entitled, “Comcast-NBC: The Road Toward Control Over What We Create.” He argues:
A Comcast-NBC combination is brazenly anti-competitve and anti-democratic. It would give one company far too much ownership over not just professionally produced media but also the ways media consumers can receive it.
Worse, if approved, it could mark the tipping point in Big Media’s push to
take control over the Internet itself. That’s where we need to focus our attention.
But wait, there’s more… Continue reading →
Bidding has begun on Comcast’s acquisition of a majority stake in NBC Universal. No, not the bidding between GE and Comcast over the terms of the sale. That was the comparatively easy part. The real bidding is over at the FCC, as various interests work to get concessions and pledges from Comcast as a condition of FCC approval of the deal. The jostling may put post-Thanksgiving Black Friday sales to shame. Everything from more kid’s shows to broadband open access mandates are potentially on the table.
And that’s if the sale is approved by the FCC at all. Groups such as Free Press called for its rejection as soon as it was announced. Commissioner Michael Copps underscored the alpine nature of the approval process, stating bluntly that the deal “faces a very steep climb with me.”
Amidst the din, however, one question has been drowned out: Why is the FCC involved in this at all? Continue reading →
I’ve just released a new PFF white paper looking at the hysteria that has often accompanied major media mergers and then taking a look at the marketplace reality years after the fact. Here‘s the PDF, but I have also pasted the entire thing down below.
_____________________________
A Brief History of Media Merger Hysteria:
From AOL-Time Warner to Comcast-NBC
by Adam Thierer
Although the pending union of Comcast and NBC Universal has not yet made it to the altar, Chicken Little-esque wails about the marriage have already begun in earnest. For example, the pro-regulatory media organization Free Press has already set up a website to complain about the deal.[1] And Jeff Chester, executive director of the Center for Digital Democracy, has called it “an unholy marriage.”[2] The fever only promises to spread once the deal is formally announced, and a lengthy fight over the deal is expected at the Federal Communications Commission (FCC) and whichever antitrust agency reviews the deal.[3]
But reality tends to play out somewhat less dramatically than the script penned by the media worrywarts. It’s worth looking back at some of the more prominent examples of media merger hysteria in recent years to understand why such panic is unwarranted, and why a deal between Comcast and NBC Universal is unlikely to lead to the sort of problems that the pessimists suggest.[4] Continue reading →
I was just digging through some old files and came across a quote that I found entertaining. Back in 2003, when he was still president and chief operating officer of Viacom, Mel Karmazin said with reference to Microsoft, AOL-Time Warner, and Comcast: “I can’t imagine being a competitor with any of these guys.” At the time, some media worrywarts made great hay of Mel’s quip and claimed, as Gene Kimmelman of Consumers Union argued at the time, that it proved how “Media moguls themselves admit their desire to avoid real competition within their industry.”
Utter rubbish. In fact, just six years after Karmazin spoke those words, Microsoft finds itself in a heated war with Google on all fronts, AOL-Time Warner has crumbled (even Time Warner Cable and Time Warner Entertainment got divorced!), and Comcast is now squaring off against telco and online video competitors that were unfathomable at the time (not to mention traditional satellite TV competitors.) In the meanwhile, Karmazin abandoned Viacom and today, as CEO of Sirius XM, is struggling to find a way to make the satellite radio universe survive the ongoing digital music bloodbath thanks to unforeseen competition from online music services and a little thing called the iPod!
It’s proof positive that media markets and digital technologies
always evolve faster than most people — even smart industry titans like Karmazin — anticipate.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.