Dish: Comcast Could Use Deal to Choke Competitors’ Online Videos

The satellite TV provider urges regulators to kill the deal.

CHICAGO, IL - APRIL 06: Hector Moreno installs a Dish Network satellite dish at a home on April 6, 2011 in Chicago, Illinois. Dish Network Corp, the second-largest U.S. satellite TV company, has purchased the assets of Blockbuster Inc in a bankruptcy auction for $320 million.
National Journal
July 9, 2014, 12:54 p.m.

Satel­lite TV pro­vider Dish Net­work wants the gov­ern­ment to block Com­cast’s $45 bil­lion bid to buy Time Warner Cable.

Charlie Er­gen, the chair­man of Dish, met on Monday with Fed­er­al Com­mu­nic­a­tions Com­mis­sion Chair­man Tom Wheel­er and oth­er agency of­fi­cials, telling them that the massive deal presents “ser­i­ous com­pet­it­ive con­cerns” for the TV and In­ter­net mar­ket­places, ac­cord­ing to a reg­u­lat­ory fil­ing re­leased Wed­nes­day.

Er­gen ar­gued that no num­ber of con­di­tions could ad­dress his con­cerns and that the FCC should kill the deal out­right.

He ex­pressed par­tic­u­lar con­cern that Com­cast would con­trol “choke points” on the In­ter­net that would al­low it to throttle ac­cess to com­pet­ing video ser­vices.

Dish sub­scribers can stream TV shows and movies on their com­puters and tab­lets, and the com­pany is plan­ning its own In­ter­net TV ser­vice. But many of those cus­tom­ers are ac­cess­ing that con­tent over Com­cast’s broad­band In­ter­net net­work, and Com­cast would gain ac­cess to mil­lions more broad­band cus­tom­ers if it com­pletes its pur­chase of Time Warner Cable.

Er­gen warned that Com­cast could put its own video in “high-speed lanes,” squeez­ing out the com­pet­i­tion.

“Each choke point provides the abil­ity for the com­bined com­pany to fore­close the on­line video of­fer­ings of its com­pet­it­ors,” the com­pany wrote in the fil­ing.

Net­flix, which had a dis­pute with Com­cast earli­er this year over dir­ect ac­cess to the cable com­pany’s net­work, also op­poses the mer­ger.

In ad­di­tion to his con­cerns about on­line video, Er­gen ar­gued that the mer­ger would al­low Com­cast to ex­tract lower rates for ac­cess to TV chan­nels. Those pro­gram­mers would then de­mand high­er fees from the oth­er TV pro­viders to make up for lost rev­en­ue, he claimed.

Sena Fitzmaurice, a Com­cast spokes­wo­man, said it “isn’t sur­pris­ing, and it isn’t new” that Dish doesn’t want stronger com­pet­it­ors.

“Dish has long been one of our most vig­or­ous com­pet­it­ors, and un­like us has a na­tion­al foot­print avail­able in tens of mil­lions of more homes than a com­bined Com­cast/Time Warner Cable,” she said.

Er­gen said that AT&T’s planned pur­chase of Dir­ecTV also “presents com­pet­it­ive con­cerns,” al­though he did not urge the reg­u­lat­ors to block it.

The FCC and Justice De­part­ment are re­view­ing both deals.

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