FCC report a mixed bag for Comcast-AT&T merger

Jun 10, 2002  •  Post A Comment

In a move that could augur ill or well for Comcast’s proposed acquisition of AT&T Broadband, a Federal Communications Commission study released last week contended that a cable company serving 27 percent of the nation’s multichannel TV households has just about as much clout over programming as one reaching 51 percent.
Under the pro-merger argument, the finding can be seen as support for Comcast’s contention that the merger would not give it dramatic new power over the programming marketplace.
With the merger, Comcast’s subscriber count would rise to anywhere from 30 percent to 40 percent, depending on whether AT&T’s investment in Time Warner Entertainment is included in the mix.
“That’s the home-run point from Comcast’s point of view,” said one industry source, who asked not to be identified.
But critics said the agency’s finding also supports the argument that cable companies should be barred from reaching 27 percent.
Andrew Schwartzman, president of the activist Media Access Project, said the study’s essential moral is the idea that “increased concentration poses serious problems.”
At deadline, representatives of the National Cable & Telecommunications Association, Comcast and AT&T were declining comment.
But an industry source said the study found that a cable company with a 27 percent reach in the marketplace is operating at “very close to full efficiency” from an economic point of view.
Media Access Project’s Mr. Schwartzman, meanwhile, said that if the study had been available a couple of years ago, it is “quite possible” that the agency could have successfully defended an FCC rule that bars cable operators from owning systems reaching more than 30 percent of the nation’s TV subscribers.
Questioning the rule’s justification, a federal appeals court ordered the agency to reconsider the rule last year.