The Comcast-NBC deal and familiar cries of doom.Every media merger seems to generate grand denunciations from liberal watchdogs and pro-regulatory policy makers. And sure enough, last week's long-expected announcement that Comcast is buying NBC Universal from General Electric prompted dire predications from all the usual suspects.
"This kind of massive media consolidation will lead to higher prices and fewer independent sources of information," said the apparently clairvoyant Joel Kelsey of Consumers Union. "This merger's potential to foreclose competition and stifle innovation is significant and real," added Mark Cooper of the Consumer Federation of America.
Under the deal, cable giant Comcast takes control of several cable channels and the Universal film studio, in addition to the NBC broadcast network. GE—whose credit unit has suffered in the financial meltdown—gets to unload an entertainment unit that's been struggling and can focus instead on its core manufacturing business. Whether this is wise for either party beats us. But it's a determination best made by the marketplace, not by anticorporate activists.
As for the media analysts at Consumers Union, the Consumer Federation of America, Free Press and similar outfits, an examination of their track record is instructive. In the past decade, such advocacy groups have warned against deals involving AT&T and SBC, AOL and Time Warner, Verizon and MCI, and Sirius and XM—on the grounds that such mergers would result in higher prices and fewer choices for consumers.
Some of these business combinations have worked out and others haven't. But it's hard to detect any consumer harm. Whether the market is phone service, Internet access or cable programing, competition and innovation abound. In 1990, cable subscribers had some 70 channels to choose from. Today that number is closer to 600, and TV content can be viewed on a laptop, smart phone or iPod, take your pick.
In addition to being the nation's largest cable company, Comcast is also a leading Internet service provider. And some skeptics worry that Comcast could withhold programming from non-Comcast customers or charge rival cable companies more to carry NBC Universal content. But Comcast has little incentive to restrict choice in a media marketplace full of alternatives. Federal regulations already in place require cable operators to offer programming to competitors at reasonable rates. If Comcast breaks these rules, the Justice Department's Antitrust Division can address it on a case-by-case basis.
The Federal Communications Commission and Justice are expected to take a hard look at this deal. Let's hope they tune out the "consumer protection" alarmists who have a perfect record of error.