Comcast’s Monopolization Merger with NBC Hits a Snag

by Matt Klassen on December 21, 2010

Earlier this month, as I was writing about Comcast’s reprised role as Scrooge this Christmas, the entertainment industry was rocked with news that the American cable and wireless network giant was intending to buying a majority stake in the television and silver screen megalith, NBC Universal, effectively making Comcast the biggest player in the American entertainment market.

For many, the impending deal between the two entertainment giants is reason for weeping and lamentation, as Comcast, a company known for its shoddy customer service, is looking to increasingly spread its influence across the nation. However, if there’s any good news in this deal, it’s that more and more people are making their voices heard in opposition to the tentative merger.

In fact, with consumer advocacy groups circulating petitions attempting to block the merger on anti-competition grounds and Comcast’s new adversary Level 3 lobbying federal regulators to impose Net Neutrality-like conditions on the venture, the deal is far from done.

Capitalism is a strange thing, alternatively offering big companies the means to drive competitors out of the market while simultaneously needing a competitive market to thrive and grow. Maintaining this delicate balance, in both Canada and American at least, falls to Federal regulators, bureaucrats charged with the goal of sniffing out potential market monopolization and anti-trust violations and re-establishing competition.

So in a blockbuster deal, estimated at around $37 billion dollars, that will merge two of the country’s largest cable companies, you can be sure that Federal regulators are working overcome to suss out the potential ramifications of such a partnership, and they’re getting plenty of help from consumer advocacy groups.

Consumers Union, the not-for-profit publisher of the popular Consumer Reports, sent petitions in to the Federal Communications Commission (FCC) on Monday signed by more than 55,000 people who opposed the joint Comcast/NBC venture. The complaint, Parual Desai, the policy counsel for Consumers Union, says, is that it gives Comcast both incentive and ability to monopolize the cable television and movie industries.

“The companies [Comcast and NBC) maintain they can be trusted not to engage in anti-competitive practices, but Comcast has a well-documented history of treating customers poorly,” Desai noted, going on to say that, “Comcast routinely hits people with rate hikes and slaps penalties on those who want to switch to another company for better service.”

Level 3, an internet backbone provider who recently accused Comcast of unfairly implementing extra charges for using its broadband network, is also opposing the merger, using the publicity generated by this story to bring awareness to its plight at the hands of Comcast.

In fact, Level 3 is going so far as to petition the FCC to implement regulations and conditions on the merger “that would require Comcast to allow Level 3 and other Internet backbone providers to interconnect their networks with Comcast’s network for free.”

So how do you feel about this proposed merger? If Comcast has the money to purchase NBC Universal, should it be allowed to, knowing that Comcast will have the ability to unfairly block out competition? With news that the FCC’s decision on this merger will come down before Christmas, or at least before the end of the year, we may not have to wait long to find out.

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Written by: Matt Klassen. www.digitcom.ca >. Follow TheTelecomBlog.com > by: RSS >, Twitter >, Identi.ca >, or Friendfeed >

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