Ad Interconnect Complaints During Comcast/TWC Bid May Have Prompted Alleged DOJ Investigation
The advertising interconnection red flags raised by an opponent to Comcast's buying Time Warner Cable has come up again as the Justice Department's reported probe into Comcast's ad interconnect policies may stem from that now-dead transaction proceeding. Whether the DOJ probe could affect other such ad interconnect agreements among multichannel video programming distributors (MVPDs) is impossible to say for now, an expert said. Such an investigation could take months or longer to resolve, one antitrust lawyer not involved in the supposed investigation told us.
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The Wall Street Journal reported Tuesday that DOJ was looking into the competitive effect of Comcast's cable ad practices, including the ad interconnect agreements that it has with other MVPDs. Comcast in a statement Tuesday said it "plan[s] to cooperate fully with the ... inquiry." Comcast also said "to better compete with local advertising platforms with significant scale, like a broadcaster or web app that can sell an entire geographic market, and to provide more and better choices to advertisers, MVPDs have long worked together through local interconnect arrangements to sell local advertising. These interconnects increase efficiency and help keep costs down for advertisers and are responsive to the needs of major local advertisers. We believe these long-standing industry practices are good for advertisers and consumers, and we and other MVPDs are continuing to provide these important services to our clients." Comcast also said MVPDs account "for only about 7 percent of local advertising sales."
The DOJ investigation may ultimately have no broader impact on MVPD interconnect practices because the department may just be looking at a particular practice in a particular instance that isn't broadly applicable, the antitrust lawyer told us. DOJ didn't comment.
When asked about what kind of complaints it has received regarding its interconnect policies, a Comcast spokeswoman pointed Tuesday to complaints raised by Viamedia during Comcast's now-dead bid to purchase TWC. During the FCC's review of that acquisition (see 1409190041), Viamedia told the agency that Comcast "already leverages its existing market position to exclude competitors from the Interconnects that it controls, by arbitrarily and capriciously dictating which companies may participate in industry cooperatives, when they can participate, and how much they must pay to do so." It also said owning TWC "will only heighten Comcast’s ability to engage in such anti competitive tactics." A Viamedia spokesman said Tuesday that ad interconnects are a vital part of the local ad industry, but its problem with Comcast specifically dealt with its inability to be part of local interconnect arrangements.
NAB called last year on the FCC to review MVPD ad interconnect policies at the same time the agency was looking into broadcasters' joint sales agreements. In a statement then, NAB CEO Gordon Smith said "the heavily consolidated pay-TV industry, unshackled by any ownership rules, is free to engage in this most collusive of advertising sales practice on a massive scale in multiple markets" (see 1403200038). NAB didn't comment Tuesday.