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Congress Pushes for Conditions on Comcast-NBC Merger

As Comcast attempts to finalize its $30 billion merger with NBC Universal before the end of the year—and before a new Congress convenes next month—the current chairman of the House committee overseeing the merger this week pushed for several conditions to protect consumers and programmers alike.

In a letter to FCC Chairman Julius Genachowski, Rep. Henry Waxman, (D-CA), chairman of the House Energy and Commerce Committee, which is overseeing the merger, urged the FCC to impose conditions that would prevent Comcast from degrading or blocking distribution of programming that might be competitive to NBC or other Comcast properties. The condition comes amid Genachowski’s recent “net neutrality” initiatives as well as recent news stories regarding the cable operator’s imposition of higher fees for carrying the increasingly popular Netflix streaming service.

In response to concerns by media companies afraid that the cable giant will give preference to NBC news and financial networks in its cable tiers, Waxman also urged the FCC to place such channels adjacent to competing outlets. Comcast “should not be permitted to isolate competitive offerings to these channels by placing them outside of the ‘neighborhood’ for such content,” Waxman told the chairman. Rep. Fred Upton, (R-Mich) is expected to take over the chairmanship of the committee when the Republicans take control of the House in January.

The American Cable Association, which represents smaller and medium sized cable operators, and a vigorous opponent of the merger applauded Waxman’s stance. "ACA commends House Energy & Commerce Chairman Henry Waxman for recognizing that the merger between Comcast Corp. and NBC Universal could reshape the media marketplace to the detriment of consumers and competition unless regulators impose meaningful conditions that take into account the difficulties small cable operators encounter while negotiating with large companies.”

Other opponents to the merger have been visiting Capitol Hill recently to make their case. ivi TV, a controversial Web streaming service that has been taken to court by broadcasters and programmers for streaming live broadcasts without permission, told the FCC this week that it wants a “broad and comprehensive scrutiny of Comcast’s existing contracts with cable and broadcast channels.” The Seattle based firm argues that it should have the right to carry such programming because it falls under the same definition of a cable operator. It also believes that the merger would hinder its ability to obtain content.

“While NBC content once traveled to consumers over the public airwaves, today it also reaches consumers via Comcast’s legacy infrastructure,” said Todd Weaver, ivi TV’s founder and CEO. “Comcast is similar to the landline phone companies who have died a slow death. They will use contractual power and exclusive access to content as a means of continuing to generate revenue from an antiquated business model delivered over yesterday’s technology. The Congress, DOJ, and the FCC should require Comcast to provide a level, competitive playing field in exchange for approval of their merger with NBC-Universal. DOJ and the FCC must insist that Comcast’s content contracts be free of exclusivity and other contractual barriers to innovation, competition, and fair value for consumers.”