Comcast’s Offensive Play

Comcast’s Offensive Play

Wesley MurchisonTuesday,30 September 2014

The Snap:

Comcast goes on the offensive in its $45 billion bid to buy Time Warner Cable. In almost a 1,000 page document submitted to the FCC, Comcast paints an ugly picture of its TV and Internet partners as bullies — opportunists exploiting the merger to gain favorable deals with Comcast in exchange for not opposing their acquisition of Time Warner.

The gist of Comcast’s complaint is that comments filed to the FCC over the summer from a variety of media companies — like Discovery Channel, Netflix and Dish Network — were motivated by a failure to secure beneficial deals from the TV and Internet cable provider. According to document, the comments against the deal were made only “because Comcast refused to grant various self-interested requests,” which came “with an express or at least an implicit offer to support the transaction (or stand down, at minimum) if the requester’s demands were met.”

The Download:

What’s behind Comcast’s offensive appears to be a gamed attempt to prevent the kind of conditions the ISP agreed to when it purchased NBC Universal. In an interview with Ars Technica, David L. Cohen, executive vice president of Comcast, was asked if anything would make Comcast walk away from the merger. The answer: onerous conditions.

“It is certainly possible that the agencies could pile on enough conditions that we would walk away from the deal, but I have no evidence, no instinct, no message that we are remotely in that situation,” Cohen told Technica’s Jon Brodkin.

As to Comcast’s accusations of “extortion,” media companies have been mostly unfazed.

Netflix spun the charge right back at Comcast and said to Recode.net that “it is extortion when Comcast fails to provide its own customers the broadband speed they’ve paid for unless Netflix also pays a ransom.”

Discovery, on the other hand, took a more subtle approach and claimed Comcast was just deflecting from their valid calm against the disadvantages to a company having such a large market share in both cable TV and Internet service. David Leavy, a Discovery spokesman, wrote in a statement to Recode.net “that Comcast could use its enhanced leverage from the proposed merger to impose onerous terms that jeopardize the ability of independent programmers like Discovery to continue investing in a diverse portfolio of content and brands.”

Macquarie Securities’ media analyst, Amy Yong, agreed when she told the New York Times that “Comcast has just become so powerful in media and distribution that it is somewhat scary and intimidating for other companies.”

Comcast’s argument since the deal went public is that the merger will allow them to offer better-quality cable and Internet services. The larger market share will let them invest more in the infrastructure, scale their Internet network and offer new services. That’s all well and good, but they have yet to answer to the legitimate complaints made by other media partners, politicians, watchdog groups and regulators.

Discovery’s David Leavy once again makes a cogent point to New York Times when he said, “Comcast’s silence on the details of key issues like program discounts, and instead, its continued strategy of intimidating voices that are not fully supportive of its position, is troubling.”

If Comcast is trying to bypass the necessary conditions that’ll protect content producers and customers from future abuses, then the FCC must scuttle the deal.

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Hat Tips:

Recode.net, New York Times, Ars Technica, Image Credit: Flickr



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