Major Programmers Oppose Comcast/NBCU Request to Change Deal Condition

That statement came in the first of six annual progress reports to the FCC on Comcast/NBCUniversal, a deal completed in early 2011. In some areas other than a condition related to the Hulu broadcast-video streaming website that NBCUniversal gave up a controlling stake in as part of U.S. approval of Comcast/NBCU, the cable operator reported exceeding milestones. It’s been “extremely complicated” for NBCUniversal to renew existing deals with Hulu to resemble terms of deals with Disney and News Corp., which also own part of the website, Comcast said. “To review its options and compare and evaluate the alternatives, NBCUniversal would need to review the other parties’ agreements; this presents a significant challenge that will have to be navigated in order to facilitate compliance."

"We significantly over-delivered” by expanding its broadband network, Executive Vice President David Cohen said on Comcast’s blog Tuesday. The company expanded the network to 2,044 miles in 33 rural communities -- one-third more than the FCC-required mileage and five times more areas than required, he wrote (http://xrl.us/bmwc4r). NBCUniversal “has negotiated and executed license agreements with several OVDs on mutually agreeable terms without resort to the specific processes of the Conditions,” the filing said. It cited online display deals with Amazon.com, YouTube and Vudu. Comcast and NBCUniversal planned many of the initiatives they now tout even without their deal, said Senior Policy Counsel Corie Wright of Free Press, which opposed the combination. A Comcast spokeswoman had no comment for this story.

For OVDs taking advantage of the benchmark condition, letting online video companies with deals for content comparable to Comcast and NBCUniversal’s programming pursue carriage with the two companies, a new protective order is needed, the filing said. “Implementation” of that condition “has presented significant challenges when OVDs invoking it have resisted sharing the peer deals on which they were basing their request,” the filing in docket 10-56 said (http://xrl.us/bmwc5h). It said the request for the Media Bureau to clarify the order is to “ensure timely compliance by NBCUniversal while providing appropriate confidentiality assurances to OVDs and peers."

The six content companies have “serious concerns” about their “highly confidential competitive information” being disclosed by OVDs to lawyers at Comcast/NBCU and a “potentially unlimited number of business persons,” said their Monday filing (http://xrl.us/bmwc5u) in the docket. The protective order Comcast and NBCUniversal seek to modify (http://xrl.us/bmwc6c) lets in-house counsel not part of making programming decisions and outside lawyers and experts get proprietary materials. Filing as “joint content interests,” the six companies said they fear that the request “is overbroad and will harm competition in the evolving video marketplace generally.” The “expansive disclosure” Comcast and NBCUniversal seek “would have a chilling effect on future online distribution deals, and skew the competitive landscape by allowing one entity to possess detailed nonpublic information about its competitors’ business dealings -- which would appear to be counter to relevant competition laws,” the six said. “The Request and proposed protective order greatly exceed the scope of the Benchmark Condition, as reflected by the far more tailored protective order adopted for arbitration cases under the same provision.” The companies said they learned of the request made on a Friday from media reports after President’s Day weekend, and sought more than the “short time frame” to file an opposition.

One OVD as of Jan. 28 had made a formal arbitration demand, as “NBCUniversal continued to make progress in good faith,” the progress report said. Project Concord Inc. last week made the first public notice of the request (CD Feb 27 p5). Comcast hasn’t faced a program access dispute with a pay-TV company that’s gone to arbitration since buying control of NBCUniversal, and there’s been no program carriage complaint against the cable operator, its progress report said. Comcast said it’s followed the news neighborhooding condition of the deal, because it hasn’t created a set of adjacent channels devoted to such content. That’s “revisionist language that deliberately misstates its own legally binding commitments,” said Government Affairs Head Greg Babyak of Bloomberg, with a neighborhooding complaint at the FCC. “It’s now time for the FCC to move swiftly to force the company to live up to its commitments."

Comcast’s efforts with public, educational and governmental channels have borne fruit, with the start of VOD and online “test platforms” in six cities where PEG programmers put their content online, Cohen wrote. Twelve hours of PEG content are on VOD, and Comcast created a “distinct website” for Philadelphia, Houston and the four other communities to distribute PEG shows on the Internet, the filing said. “This soft launch will be followed by increased promotional and marketing support.” What Comcast calls Project Open Voice is a “valuable” way for PEG channels to supplement their cable programming, and there’s a “great” need for such initiatives, said Executive Director Sylvia Strobel of public access group Alliance for Community Media. “I wish more communities could benefit from the availability of highly produced and aggregated local content offerings on VOD and online.”