A pair of Comcast-funded--and FCC requested--economic reports say online video is a complementary service to pay-TV and contends a Comcast-NBC Universal merger wouldn't limit competition and, in fact, could even benefit consumers as Comcast developed new TV and Internet services. The reports, for which Comcast wouldn't say how much it paid, may add momentum to Comcast's bid to complete its $30 billion deal for NBC Universal, which is facing strong opposition from consumer groups and is in the midst of an FCC and Justice Department examinations.
In one of the reports, Gregory L. Rosston, deputy director of the Stanford Institute for Economic Policy says the cable company would benefit from the deal by gaining clout to negotiate content deals that it could use to develop new offerings to consumers.
The other report, from Mark Israel, senior vice president of consulting firm Compass Lexecon, and former FCC chief economist Michael Katz, contends that online video could be seen as a value-added type service, not something that competes with the pay-TV service Comcast already offers.
At least one critic was highly skeptical.
"Competition seems to flourish in Comcastland, even though cable and Internet access rates continue to increase far in excess of inflation," he said in a statement. "Its new analysis of online video is especially problematic in this regard," said Andrew Jay Schwartzman, senior vice president and policy director of Media Access Project. "Comcast argues that the NBC network is not 'must have' programming, and asks us to believe that it would never withhold NBC or its cable networks from Internet competitors. This is not convincing."
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