Trade group: Comcast takeover of NBC ‘will send monthly cable bills higher by billions’

By Stephen C. Webster
Tuesday, November 9, 2010 18:45 EDT
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As the proposed takeover of NBC-Universal by cable TV provider Comcast comes down to the wire, a trade organization representing hundreds of smaller cable and internet providers has urged federal regulators to protect consumers from a deal they say “will send monthly cable bills higher by billions of dollars over the next decade”.

The American Cable Association’s (ACA) criticism of the arrangement was published Monday night. It followed a Monday afternoon statement by Vermont’s Independent Senator Bernie Sanders, who promised to do everything in his power to block a merging of the two companies.

Comcast’s purchase of a 51% stake in NBC-Universal would bring together one of America’s largest media conglomerates and the nation’s largest cable TV provider, creating a company worth over $30 billion. The cable provider said recently it hopes federal regulators approve the deal by year’s end.

However, a study published by the ACA noted that cable customers would be harmed by the deal to the tune of $2.4 billion over the next nine years. Research for the group’s publication was carried out by conducted by Dr. William Rogerson, a professor of economics and a former chief economist for the Federal Communications Commission.

“Rogerson’s study concluded that the transaction will allow Comcast-NBCU to raise programming fees way above levels the two would be able to command as separate and independent companies, and that these fee increases will largely be passed through to subscribers in the form of higher subscription prices,” the ACA noted. “According to Rogerson, the quantifiable consumer harm of the transaction ($2.566 billion) is more than 10 times greater than the quantifiable consumer benefit ($204 million) claimed by Comcast-NBCU.”

However, instead of calling for the FCC to put the kibosh on the deal, the group proposes a number of conditions it would like regulators to place on the transaction. They mainly involve protecting smaller cable and Internet operators from the anticompetitive effects of a massive conglomeration the likes of Comcast-NBCU.

Read the American Cable Association’s full study [PDF link].

Stephen C. Webster
Stephen C. Webster
Stephen C. Webster is the senior editor of Raw Story, and is based out of Austin, Texas. He previously worked as the associate editor of The Lone Star Iconoclast in Crawford, Texas, where he covered state politics and the peace movement’s resurgence at the start of the Iraq war. Webster has also contributed to publications such as True/Slant, Austin Monthly, The Dallas Business Journal, The Dallas Morning News, Fort Worth Weekly, The News Connection and others. Follow him on Twitter at @StephenCWebster.
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