News giant Bloomberg has filed a formal complaint with the Federal Communications Commission, accusing Comcast of violating conditions it agreed to as part of its merger with NBC Universal, which created a $30 billion entertainment colossus.
Bloomberg argues that Comcast, the nation’s largest cable operator, has exiled its financial news television network to cable-dial Siberia, far away from the “existing news neighborhoods” where it groups major news channels like MSNBC, CNBC, and Fox News.
Bloomberg’s dispute with Comcast goes to the heart of objections raised by critics of the NBC Universal deal, who had argued that Comcast could use its market power to favor its own channels to the disadvantage of rival programming, in this case Bloomberg TV.
For its part, Comcast says it “does not, and since the transaction has not, ‘neighborhooded’ channels on our systems.” The cable giant argues that the FCC’s “neighborhooding” requirement would only apply if Comcast-NBCU actually did neighborhood news or business news channels in the future, but since it does not at present, the FCC’s order approving the merger “does not support Bloomberg TV’s request.”
Thus, the outcome of this squabble will likely center on whether the FCC determines that Comcast does, in fact, neighborhood its channels or not.
Bloomberg’s complaint centers on a specific condition the FCC applied to the merger, which required that “if Comcast now or in the future carries news and/or business news channels in a neighborhood, defined as placing a significant number or percentage of news and/or business news channels substantially adjacent to one another in a system’s lineup, Comcast must carry all independent news and business news channels in that neighborhood.”
In Washington DC for example, Comcast carries CNN, Fox News, MSNBC and CNBC on channels 35-39. Bloomberg TV, by contrast, is way down the dial ot channel 103, next to C-Span 2 and C-Span 3.
Bloomberg has an intense interest in this issue as it tries to expand the reach of Bloomberg TV, which has struggled to gain traction in the shadow of its much more widely viewed rival, CNBC, which Comcast now controls following the merger. When it approved the merger, the FCC noted that “by foreclosing or disadvantaging rival programming networks, Comcast can increase subscribership or advertising revenue for its own programming content.”
In a statement, Greg Babyak, head of Government Affairs at Bloomberg, accused Comcast of “failing” to abide by the conditions to which it agreed as part of the merger.
“The Commission stressed the critical role of independent news in its Order and indeed, this was a significant component of the conditions that enabled the FCC to have the confidence to move forward with the merger,” Babyak said. “If Comcast is dragging its feet on a condition this clear, we can only imagine how they will live up to conditions that are potentially less clear.”
Babyak said that Bloomberg is “confident the FCC will enforce this condition,” but noted dryly that “if merger conditions are shown to be without meaning, then it becomes impossible for the Commissioners to assess whether moving forward with other mergers is in the public interest.”
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