Continuing to make its case for increased restrictions on Comcast's (Nasdaq: CMCSA) pending NBC Universal acquisition, the American Cable Association (ACA) released a study--and provided access to the study's author--saying that an unencumbered Comcast will cost subscribers $2.4 billion more over he next nine years.
Conducted by Northwestern University Economics Professor William Rogerson--who also served as chief economist for the FCC from 1998-99--the survey is another step in ACA's ongoing campaign to point out to federal officials that the merger, left unfettered, poses substantial threat to ACA members and consumers, said President-CEO Matt Polka.
In particular, Polka said, the ACA pointed out the "horizontal harm" that would result from the merger from NBC-Comcast potential cable programming bundles. Rogerson's study was solicited to show the "economic mechanics to show why these harms will occur."
Rogerson said the new combo company would create $1.6 billion in fees charged for NBCU national cable networks; $651.2 million for Comcast regional sports networks and $355.6 million in fees for NBC owned and operated stations.
The merger, he said, is both vertical, between NBC the programmer and Comcast the cable company and horizontal, between NBC's programming assets and Comcast's programming assets.
Vertically, he said, "The problem with a merger of this sort is that after the merger Comcast will have both the ability and the incentive to raise prices to MVPDs (multichannel video programming distributors) that compete with Comcast. Horizontally, "Combined control of multiple blocks of must-have programming are going to allow the new owner--Comcast-NBC--to raise prices for all of this programming."
- see this news release
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