WASHINGTON, D.C. Dec. 3, 2009 - In response to the Comcast-NBC merger announcement this morning, Free Press and the Consumer Federation of America released a new analysis showing why the deal poses a major threat to video competition that would seriously harm the public interest.
"The pundits who are predicting this merger will be a cakewalk haven't done a careful analysis of the damage it will do to the competitive fabric of the video marketplace," said Mark Cooper, research director for the Consumer Federation of America. "This merger's potential to foreclose competition and stifle innovation is significant and real."
The report, Why the Comcast/NBC Merger Poses a Major Threat to Video Competition Antitrust Authorities Cannot Ignore, finds:
* A Comcast-NBC merger would hurt competition in traditional video markets. A merger between the nation's No. 1 cable operator and a major television network threatens competitive rivalry and diversity in the video marketplace. The new entity could leverage its control over content to charge more to its rivals - costs that will ultimately be paid by consumers.
* A Comcast-NBC merger would hurt competition in the emerging online video market. Comcast is the largest residential broadband Internet service provider; NBC produces top-notch content and has a substantial interest in the online video provider Hulu. A merged company would have a powerful motive to starve competing online video sources by denying them access to vital content.
* A Comcast-NBC merger would trigger more media consolidation. Approval of this deal will undoubtedly trigger a merger wave, as the remaining players in both the distribution and content markets seek to muscle-up to match this new behemoth. As a result, competition from new entrants will be limited, consumer choice will be restricted, and prices will rise.
The report also details the strict and comprehensive conditions that would need to be imposed by federal authorities before such a merger could be contemplated.
"The Obama administration has made a commitment to reinvigorating the nation's antitrust laws," said Corie Wright, policy counsel of Free Press. "They can't ignore the severe threat this merger poses and must take the necessary measures to prevent harm to competition and consumers. The correct response to this merger is to just say no."
Since 1968, the Consumer Federation of America has provided consumers a well-reasoned and articulate voice in decisions that affect their lives. CFA represents some 300 nonprofit organizations from throughout the nation with a combined membership exceeding 50 million people. Visit www.consumerfed.org
Free Press is a national, nonpartisan organization working to reform the media. Through education, organizing and advocacy, we promote diverse and independent media ownership, strong public media, and universal access to communications. Learn more at www.freepress.net
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