The New York Times published an editorial urging regulators considering the merger conditions for Comcast and NBC Universal to forbid restrictions on online video. Highlights:
Television is undergoing a wrenching change. Companies like Netflix and Google TV are lining up to offer movies and TV online. Cable systems are developing online bundles as they add broadband customers but lose TV subscribers. Broadcast networks are still figuring out how to sell their shows online, and charging cable systems more as ad money moves to the Internet.
This is not the classic “horizontal merger” between two companies that do the same thing. Comcast produces little television and NBC does not own cable. The issue is that the merged company would own both a major producer of TV and movies and the dominant distributor of TV and movies in big media markets. It would have about a quarter of the multichannel market and about a fifth of broadband subscribers.
Online TV is particularly vulnerable. Unlike cable, online providers are not covered by program access rules that force networks to provide their programs on reasonable terms. Companies like Netflix and Hulu — which is owned by several TV networks, including NBC — get shows from TV networks and movie studios and distribute them on somebody else’s broadband.
What if the combined company limited access to its shows online to subscribers of its broadband service or cable packages? Or if it refused to provide NBC Universal content to rival online services? It could degrade the online signal of rivals, or charge through the roof to transmit their content to its broadband subscribers.
If the merger between Comcast and NBC is to be approved, these tactics must be put off limits. The merged company must be made to provide content not only to rival cable systems but also to Internet-only rivals, on reasonable terms. And it should also commit, in a legally binding way, to offer reasonably priced broadband subscriptions independent of its TV bundles.