Comcast bid heightens risk to consumers after repeal of net neutrality and expiring NBCUniversal merger conditions

[WASHINGTON, D.C.] – U.S. Senators Richard Blumenthal (D-CT), Bernie Sanders (I-VT), Elizabeth Warren (D-MA), and Edward J. Markey (D-MA) today wrote Makan Delrahim, the Assistant Attorney General leading the Antitrust Division, to urge the Department of Justice to conduct a thorough antitrust review of Comcast’s bid for several major 21st Century Fox (Fox) entertainment assets, especially after the repeal of net neutrality and the expiration of Comcast/NBCUniversal merger conditions this September.

According to news reports, Comcast is currently in a bidding war with Disney over Fox’s entertainment assets. In response to Disney’s bid, the DOJ has proposed an antitrust settlement that would require Disney to divest regional sports networks to restore competition lost by the proposed merger. However, the DOJ has yet to propose antitrust conditions on a potential Comcast acquisition, which poses unique horizontal and vertical risks to competition. 

 “Comcast will soon be completely unfettered from the federal oversight that has imposed at least a minimal set of safeguards against anticompetitive behavior.” the senators wrote.  “The current bidding war over Fox’s assets is occurring amid industry-wide consolidation, as media and telecom companies grow bigger through mergers and acquisitions of video content. We were concerned that Comcast’s customers could bear the burden of such an acquisition, with little benefit to them or the video market.”

“We write to urge the Antitrust Division to conduct a thorough review of Comcast’s bid that considers the heightened risk of consumer harms posed by this proposed merger, which are exacerbated by the company’s history of practices after its acquisition of NBCUniversal and its unique market position.”

The full text of today’s letter is available here and copied below.

July 11, 2018

Dear Assistant Attorney General Delrahim,

As you know, Comcast/NBCUniversal and Disney are currently in competition over the acquisition of several major entertainment assets from Twenty-First Century Fox. While the Department of Justice has proposed a settlement that would require Disney to divest regional sports networks to fully restore competition lost by the proposed merger, no such conditions have been imposed on a potential Comcast acquisition. We write to urge the Antitrust Division to conduct a thorough review of Comcast’s bid that considers the heightened risk of consumer harms posed by this proposed merger, which are exacerbated by the company’s history of practices after its acquisition of NBCUniversal and its unique market position.

Comcast’s acquisition of NBCUniversal has been criticized by experts, who argue that the conditions imposed on the deal were insufficient and under-enforced. The need to protect consumers from the harmful effects of the proposed merger is evident in the numerous settlements with Comcast regarding past anticompetitive practices, such as the use of channel listings to prioritize its content over that of outside competitors and the overbilling of customers. Comcast has repeatedly demonstrated a willingness to use its dominance in the broadband market as leverage in video­ – including exempting its streaming services from data caps, withholding speed upgrades for customers not subscribed to traditional pay TV, and refusing to provide appropriate interconnection capacity to rivals.

Comcast will soon be completely unfettered from the federal oversight that has imposed at least a minimal set of safeguards against anticompetitive behavior. Last month, the FCC repealed the strong net neutrality rules imposed by the Open Internet Order that prevented broadband providers from blocking or degrading content. Shortly thereafter, Comcast began to restrict online video for its mobile services unless customers paid more for higher quality access. This September, the conditions that governed the NBCUniversal acquisition are set to expire, including provisions that require it to not retaliate against or punish certain types of competitors. These past lessons show a clear need for a comprehensive review of further acquisitions by Comcast. 

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