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Groups Say Bloomberg Complaint Shows Difficulty in Enforcing Merger Conditions Groups Say Bloomberg Complaint Shows Difficulty in Enforcing Merger Co...

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Groups Say Bloomberg Complaint Shows Difficulty in Enforcing Merger Conditions

Public interest groups said Tuesday that the Federal Communications Commission's poor track record in enforcing conditions it has imposed on the Comcast-NBC Universal merger and other transactions shows why the commission should block instead of trying fix other problematic industry transactions, including a pending deal between Verizon and Comcast and other cable firms.

"Comcast's inability to live up to the conditions [imposed on its merger with NBCU] are evidence that behavioral conditions do not work in a market as consolidated as the market for telecommunications services," Free Press Policy Adviser Joel Kelsey said during a conference call to discuss Bloomberg's complaint against Comcast for failing to abide by a condition the financial news provider sought and won as part of the FCC's approval of Comcast's acquisition of NBCU.

In its complaint filed in June with the FCC, Bloomberg claimed Comcast had failed to abide by a condition requiring the cable provider to include Bloomberg's financial news channel with other news channels if Comcast "now or in the future" decides to group news channels into the same "neighborhood" of channels on its cable systems. In its comments Tuesday on Comcast's annual report outlining its compliance with the merger conditions, Bloomberg gave new examples that it says show Comcast has not complied with the neighborhood condition.

"In addition to the hundreds of news neighborhoods Comcast has already created on its systems, Bloomberg's review of cable system channel data reveals that Comcast has created at least two additional news neighborhoods in a manner that would violate the news neighborhood condition between 2011 and 2012: (a) Crescent City, Florida and (b) Claxton, Georgia," Bloomberg said in its letter Tuesday to the FCC.

Greg Babyak, Bloomberg's head of government affairs, urged the FCC to force Comcast to comply quickly becuase the conditions imposed on the deal only apply for seven years. "We hope that there's a greater sense of urgency since with every passing day we lose protections that we think [are] essential," he said.

Comcast dismissed the latest salvo from Bloomberg, saying the financial news provider is "willfully" misinterpreting the condition imposed by the FCC.

"Comcast does not 'neighborhood' news channels in the way Bloomberg seeks to be repositioned," Comcast spokeswoman Sena Fitzmaurice said in response to Bloomberg's latest comments. "Bloomberg is not entitled to any relief pursuant to its threatened complaint. And its continued rehashing of the same arguments it has previously made smacks of desperation."

The FCC would not comment on the spat. But Kelsey and others pointed to the dispute as a reason why the commission should reject troublesome transactions including Verizon's spectrum deal with Comcast and other cable firms. They argue that the FCC does not have the resources or the will to enforce conditions aimed at ensuring that mergers and other transactions will not harm consumers.

The FCC is currently weighing whether to allow Verizon to buy spectrum from a joint venture that includes Comcast, Time Warner Cable, and Bright House Networks and from Cox Communications as part of a separate transaction. Free Press, Public Knowledge and other groups argue that the deal will undermine competition in the wireless market.

"The inability of the commission to decide this calls into question whether the agency is able to enforce [the Comcast-NBCU merger] conditions or any other conditions. [And it] raises questions about the spectrum sale to Verizon," Public Knowledge President Gigi Sohn said.

Parul Desai, communications policy counsel for Consumers Union, echoed this view, adding that the commission may just "have to say no" to more transactions instead of trying to fix them with conditions.

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