Discovery Communications, parent company of the Discovery Channel and other pay TV programming, has come out in opposition to Comcast's (NASDAQ: CMCSA) $45.2 billion acquisition of Time Warner Cable (NYSE: TWC).
In an FCC filing, Discovery said that the merger would "create monopoly-like conditions in the TV space" because the proposed merger "could result in lower quality, less diverse programming and fewer independent voices among programmers," a story in Time said.
Time said a Discovery Communications representative declined to explain the timing of the filing, but industry analysts suggested it could be the start of a wave of such opposition by other large networks in filings to the FCC and the Justice Department.
In particular, Discovery laid out concerns that Comcast would "use its enhanced position to impose prices, terms and conditions on programmers that are overly favorable to the MVPD; impose 'most favored nation' (MFN) clauses in agreements with programmers; interfere with the developing use of alternative content viewing devices and services; obtain an unfair information advantage over programmers in carriage negotiations and in the advertising realm by refusing to share set-top box data with programmers; and exercise substantial control over both the national and local ad sales markets to the detriment of programmers seeking to capture a share of that market."
The FCC has received 75,000 complaints about the merger, but most have not come from programmers who are understandably worried that opposition might impact existing deals with both service providers. For instance, the story said, Comcast paid $9.1 billion in retransmission fees last year. The concern among programmers is, in part, what will happen when a combined company controls about 30 percent of the U.S. TV space and 19 of 20 top markets.
Meanwhile, a New York Post article suggested that even if the FCC imposes restrictions on the deal, it will be essentially toothless in enforcing them based on past experience. As part of its deal to acquire NBCUniversal, Comcast agreed to provide low-cost broadband service to low income families and paid a fine for not marketing the $10 service widely enough, the story said.
Other instances include the Tennis Channel, which has not yet gained "broad distribution" on Comcast's lineup and Bloomberg TV, which was supposed to be located near other business channels but hasn't moved.
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