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Like a gust of wind reigniting a dying ember on a dry hillside, President Donald Trump has inflamed long-simmering tension between Comcast and a cable trade group still unhappy with its 2011 acquisition of NBCUniversal.
The American Cable Association, which reps small and mid-size cable and broadband providers (and not the top players like Charter, Altice and Comcast Cable, which are part of the NCTA), wrote a letter to the Department of Justice. The letter calls for an investigation into Comcasts conduct since bringing NBCU into the folk.
A consent decree imposed by regulators at the DOJ and FCC in 2011 made stipulations for how Comcast would have to behave for a period of years after the acquisition. The consent decree just expired a few weeks ago, and the ACAs letter to DOJ antitrust chief Makan Delrahim urges a formal inquiry. The letter, which was dated Nov. 6 but was not sent until this morning, asserts that Comcast “has shown a willingness to harm rivals,” in defiance of the consent decree. With a broadcast network, cable networks, regional sports networks and the No. 1 cable system in the U.S., the combined company is able to weaponize key assets against competitors, the ACA alleges.
The approval of the Comcast-NBCU merger by regulators during President Obamas administration, which employed so-called “behavioral remedies” rather than structural ones, was invoked frequently during the trial of the DOJs lawsuit last spring seeking to block AT&Ts $79.1 billion purchase of Time Warner. U.S. District Court Judge Richard J. Leon, who ruled in favor of AT&T in the suit, similarly blessed the Comcast-NBCU deal. The ACA, which is known for being vocal on industry matters even if it does not hold all the cards in cable, has aligned itself with Trumps DOJ in its fight against AT&T.
Once Fox Business reported on the tussle, soon Trump was dutifully tweeting his concern. The ACA has “big problems with Comcast. They say that Comcast routinely violates Antitrust Laws,” he wrote, adding capitalization for extra emphasis. Quoting Charlie Gasparino of Fox Business, he said that the Comcast-NBCU combination has “much more potential for damage to consumers” than does AT&Ts takeover of Time Warner.
Comcast did not comment on Trumps tweet, but issued a statement in response to the ACA letter.
“The video programming and distribution markets are incredibly competitive,” the statement said. “New programmers and distribution platforms are offering consumers increasing choices on what and where to watch. … Among other things, Comcast Cable has brought Netflix and YouTube to our X1 platform. And NBCUniversal has provided content to Hulu, Netflix, and hundreds of other traditional and over-the-top providers.” The letter from the ACA, the statement concluded, “is without merit and constitutes an inappropriate attempt to gain leverage in the commercial marketplace.”
Gasparinos initial report said “market pressure” was starting to be applied to Comcast over the ACA petition. But the companys shares are unchanged in the home stretch of the trading day.
A federal appeals court in Washington will hear oral arguments December 6 in the DOJs appeal of Leons decision in the AT&T suit.
American Cable Association has big problems with Comcast. They say that Comcast routinely violates Antitrust Laws. “These guys are acting much worse, and have much more potential for damage to consumers, than anything AT&T-Time Warner would do.” Charlie Gasparino
— Donald J. Trump (@realDonaldTrump) November 12, 2018
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