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ACA Unveils Transaction-Specific Comcast-NBCU Merger Conditions To Protect Consumers and Competition

Trade Group Proposes Remedies Tailored To Harms Stemming From Unprecedented Joint Venture

PITTSBURGH, August 19, 2010 - The American Cable Association called on the Federal Communications Commission to impose a range of conditions on the Comcast-NBC Universal transaction to prevent the unprecedented media combination from using programming and distribution dominance to undermine competition by greatly escalating the price of cable and broadcast channels that market rivals, including ACA members, must purchase to remain in business.

"The Comcast-NBCU joint venture is the most serious threat to the media ecosystem inat least a decade, justifying regulatory intervention to prevent the media giant from harming competitors and their subscribers through the exercise ofundue market power obtained as a result of the deal. Without the adoption ofACA's proposed conditions, Comcast-NBCU will have unmatched leverage intraditional and online media markets to harm competitive cable and satelliteoperators by driving up their programming costs to very troublesomelevels," ACA President and CEO Matthew M. Polka said. "With the risks so high, the FCC must not fail to protect consumers."

By combining assets, Comcast-NBCU will be in a position to dominate the media landscape in markets across the country if left unchecked by meaningful government protections to ensure access to NBC's 10 owned-and-operated TV stations, Comcast's nine regional sports networks (RSNs), and Comcast-NBCU's suite of category-leading national cable networks on fair and reasonable terms. Comcast is already the largest multichannel video programming distributor (MVPD) and the largest residential broadbandaccess provider in the country.

In previous FCC filings, ACA identified and inventoried the harms stemming from the Comcast-NBCU deal in order to craft and propose narrowly tailored and transaction-specific remedies that would serve the interests of millions of consumers and advance competition in one of the most dynamic sectors of the national economy.

ACA's desired conditions unveiled today target and address the competitive harms of the proposed combination and are robust and durable to ameliorate sufficiently the deal's many negative effects.  ACA's conditions would close gaps in remedies used by the FCC to condition previous media combinations that while well-intentioned, proved in practice to be insufficient to protect consumers, particularly those served by smaller operators.

For a period of nine years, ACA is recommending the following conditions, should the FCC decide to approve the license transfers associated with the Comcast-NBCU transaction. In the main, ACA's conditions would simplify contracts, lower arbitration costs, and contain special conditions for smaller operators that cannot afford baseball-style arbitration available to all pay-TV providers.

 

General Conditions Applicable To All Pay-TV Providers

  • Comcast-NBCU is required to sell NBC stations and regional sports networks (RSNs) on a stand-alone basis, meaning each NBC station and RSN cannot be bundled with carriage for any other video programming network.
  • FCC program access rules shall apply to all Comcast-NBCU TV stations as well as all satellite- and terrestrially delivered RSNs and national cable networks for distribution on any delivery platform, including online and mobile.
  • Dispute resolution through baseball-style commercial arbitration shall include a right to program carriage until the matter is resolved.

Special Conditions For Smaller Pay-TV Providers

  • Comcast-NBCU is prohibited from requiring any pay-TV provider with 125,000 video subscribers or less locally to pay a fee for an NBC station or RSN that is 5% greater than the lowest fee paid by any other local pay-TV distributor -- including Comcast itself -- for the market's NBC signal or the area's RSN.
  • Comcast-NBCU officials are required to certify to the FCC on an annual basis that all eligible retransmission consent and RSN contracts comply with the 5% rule.
  • Dispute resolution for smaller pay-TV providers through a newly designed, lower-priced commercial arbitration system, different from baseball-style, shall include a right to program carriage until the matter is resolved.
  • Comcast-NBCU shall negotiate in good faith with bargaining agents, including the National Cable Television Cooperative, and dispute resolution through baseball-style commercial arbitration shall be available to bargaining agents. Comcast-NBCU could not refuse to negotiate with a bargaining agent on behalf of all its principals or members. 

About the AmericanCable Association

Based in Pittsburgh, the American Cable Association is atrade organization representing nearly 900 smaller and medium-sized,independent cable companies who provide broadband services for more than 7.6million cable subscribers primarily located in rural and smaller suburbanmarkets across America.  Through active participation in the regulatoryand legislative process in Washington, D.C., ACA's members work together toadvance the interests of their customers and ensure the future competitivenessand viability of their business.  For more information, visit http://www.americancable.org/

 

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