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Antitrust review of Comcast-NBC deal considers effect on Apple's iTunes

post #1 of 44
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As Comcast's bid to purchase NBC Universal goes through a federal review, the U.S. government is investigating the effect the deal might have on Internet-based video services like Apple's iTunes Store.

A new report from The Wall Street Journal revealed that the U.S. Justice Department's antitrust division is taking a close look at Comcast's intended $13.75 billion purchase of the television and movie unit under the NBC Universal umbrella, currently owned by General Electric. It is said that the federal scrutiny is not likely to kill the deal, but the government is still interested in whether Comcast, the largest cable provider in the U.S., would block content deals with Internet-based video services like iTunes.

"The regulators are considering the issue as the video market is undergoing its biggest transformation in decades," authors Jessica E. Vascellaro and Thomas Catan wrote. "A range of companies -- Netflix Inc., Tivo Inc., and Apple Inc. among them -- are racing to provide access to video over the Internet, and a growing number of them are serving up content to Web-connected televisions as well as computers. That is further encroaching on the turf of cable and satellite companies, which are trying to co-opt the threat by launching Web-video services of their own."

Interestingly, recent rumors have suggested that three of the four largest networks in the U.S. -- ABC, CBS and Fox -- are currently negotiating with Apple to offer 99 cent TV show rentals through iTunes. Absent from that list: NBC.

Previously, Apple had hoped to offer a subscription-based TV plan with major networks. But that deal never materialized, and reports indicated that a Comcast-owned NBC was unlikely to be a part anyhow.

The Journal noted that current federal rules require cable companies that own content to make the programming available on reasonable terms to competitors. Satellite-based operators Dish Network and DirecTV want those terms extended to content made available over the Internet.

Sources indicated to the paper that the Justice Department is concerned that a Comcast-NBC deal would give the company an incentive to block digital distribution services.

Cable companies like Comcast remain one of the biggest hurdles for Apple in its attempts to grow its digital distribution business. Earlier this summer, Chief Executive Steve Jobs acknowledged that his company's Apple TV business remains a hobby because it's hard to break in to a market where consumers are used to receiving a cable box for free or $10 per month.

"The only way that's ever going to change," Jobs said, "is if you can really go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all of these different functions, and get it to consumers in a way they're willing to pay for it. And right now, there's no way to do that."

Recent rumors have suggested that Apple will launch an all-new version of the Apple TV running the same iOS operating system that powers the iPhone, iPad and iPod touch. Such a device could have access to the App Store and allow developers to create special applications for the set top box.

The new Apple TV, rumored to be called iTV, could be introduced as soon as this Wednesday, when Apple has scheduled a media event to unveil new products.
post #2 of 44
Quote:
ABC, NBC and Fox -- are currently negotiating with Apple

Quote:
Absent from that list: NBC.

Excellent journalism and proof reading there!
post #3 of 44
This is part of the answer to question "should Apple buy a cable provider?" The answer is no, unless they really want to invite this kind of scrutiny, not just over the purchase, but probably over every move they make forever after. Being both a producer and deliverer of content looks a lot like vertical integration, which isn't illegal per se. But if you're big enough to potentially use the integration for anticompetitive purposes, then the regulators are going to take competitors' complaints seriously.
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post #4 of 44
I doubt the itv will make an appearance this week. And I'm still not sold on the name "ITV" I rekon it's another decoy, I prefer "iVision" or "iViewer".
post #5 of 44
So I guess NBC won't plug GE christmas lights anymore during their holiday broadcasts.

On the flip side, they will plug Comcast. And I am not a fan of this monopoly. Honestly I wish Comcast gets split up like Ma Bell. Having just one choice for cable sucks. You can't stick a dish in some apartments and U-Verse just recently became available with Ridiculous pricing.
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post #6 of 44
They really shouldn't allow Comcast to buy NBC. I would think that keeping the content off the internet or restricting it from other cable companies would be a reason for this deal.
post #7 of 44
Where's Teddy Roosevelt when we need him? Comcast has already gotten way too big for anyone's good.
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post #8 of 44
Quote:
Originally Posted by Robin Huber View Post

Where's Teddy Roosevelt when we need him? Comcast has already gotten way too big for anyone's good.

Buried deeply enough that he can only be resurrected when the subject doesn't involve business regulation.
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post #9 of 44
I'm rather impressed that a government department has displayed the brains to be able to see the potential alterior motive of Comcast - they're not normally that bright!
post #10 of 44
"Sources indicated to the paper that the Justice Department is concerned that a Comcast-NBC deal would give the company an incentive to block digital distribution services."

Ya think?
post #11 of 44
Quote:
Originally Posted by Dr Millmoss View Post

This is part of the answer to question "should Apple buy a cable provider?" The answer is no, unless they really want to invite this kind of scrutiny, not just over the purchase, but probably over every move they make forever after. B.

I think it makes exactly the opposite point.
If you're a big enough corporation, you can essentially buy the regulators.
There's no reason on earth that the NBC/Comcast merger should be allowed to proceed, but its being taken as a rubber stamp, as noted earlier in the article.
post #12 of 44
Quote:
Originally Posted by GQB View Post

I think it makes exactly the opposite point.
If you're a big enough corporation, you can essentially buy the regulators.
There's no reason on earth that the NBC/Comcast merger should be allowed to proceed, but its being taken as a rubber stamp, as noted earlier in the article.

No, I don't think it does. As the article says, the purchase is being scrutinized by the DoJ. They may or may not approve it (or apply conditions), but more importantly, they've indicated an interest in the competition issues it raises. This suggests that future complaints from competitors are going to be investigated instead of ignored.
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post #13 of 44
Comcast is trying to do the same thing that Verizon has done in the phone and internet provider space, put a huge strangle hold on it and not allow competition. These companies do not want smaller more efficient companies to offer you services using their networks.

back in 1996 the government open up the phone networks to any company who wanted to use them since you tax dollars in the past subsidized the phone companies to build their networks. Well VZ did everything they could to keep competition off their copper lines.

Well Comcast does not like the fact you can go and get content anywhere you like on the internet and they can not make money other than what they charge you for the connection. These companies do not want to be fat dumb pipe they know the real money lies in the content and people will pay for content.
post #14 of 44
Quote:
Originally Posted by Dr Millmoss View Post

No, I don't think it does. As the article says, the purchase is being scrutinized by the DoJ. They may or may not approve it (or apply conditions), but more importantly, they've indicated an interest in the competition issues it raises. This suggests that future complaints from competitors are going to be investigated instead of ignored.

Wow! That's a huge stretch. The language used to describe business issues and the government itself have been co-opted by Republicans (not necessarily conservatives) to support corporate interests above all else. So any changes you may perceive are merely window dressing at this point. This deal will likely go through without much trouble. If not, I will be pleasantly surprised.
post #15 of 44
Quote:
Originally Posted by Dr Millmoss View Post

No, I don't think it does. As the article says, the purchase is being scrutinized by the DoJ. They may or may not approve it (or apply conditions), but more importantly, they've indicated an interest in the competition issues it raises. This suggests that future complaints from competitors are going to be investigated instead of ignored.

I'd love you to be right, but I've not seen one assessment indicating that there's the slightest chance of disapproval, and there's only 1 senator leading the charge against it.... Go Al!
post #16 of 44
The regulators are considering the issue as the video market is undergoing its biggest transformation in decades,"


See, it's quotes like this that make me think Apple has a real battle ahead as many shows are now online with some like the Big Brother reality show airing its episode an hour after it plays inbthe west coast. Now imagine you have 10 shows you watch weekly with a few others from time to time. This could end up costing mote than cable at .99 cents and the hardest part is the net offers them for free with far Leeds commecials than TV. I see this as one tough nut to crack. Subscriptions yes but .99 cent??? Hmm
post #17 of 44
Quote:
Originally Posted by PaulMJohnson View Post

I'm rather impressed that a government department has displayed the brains to be able to see the potential alterior motive of Comcast - they're not normally that bright!

Don't worry.

Quote:
It is said that the federal scrutiny is not likely to kill the deal.
post #18 of 44
I dont think there will be an Apple TV refresh. If they think it's going to be big, they wont put as an 'also-introduced' aside new iPods.
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post #19 of 44
We all need to stand up against this one. Comcast already has been anticompetitive with versus programming on DirecTV. I would expect NBC being held hostage as well
post #20 of 44
Eventually, shows will simply be an app that will be sold episode by episode, or as a season pass to consumers. NBC, CBS, etc... will disappear over time.

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post #21 of 44
This is why the iTV can be a game-changer. If by going IOS and allowing content broviders to sell subscriptions on their own to the consumer directly, they get an excellent return on investment. Personally I could care less about channel (well, save for ESPN) but more on the show its self. I'd buy a subscription to watch madmen, but not to the AMC channel itself....unless thats how they want to do it. Channels a-la-carte is the future....and a way for studios to know better who buys what and which shows/channels are mamking money. This can give the studio leverage against the cable operators who, lets be honest, are tyranical about getting what they want.

I'm not so sure the itv will show up now, but I think it changes the model for how these things will run. The only part of my theory that doesnt compute is how apple makes money. A 99$ box cant make them more than 30$...and they make a few bucks on the app, but nothing on the content....so maybe I'm totally wrong
post #22 of 44
Quote:
Originally Posted by Sleepy Dinosaur View Post

I'm not so sure the itv will show up now, but I think it changes the model for how these things will run. The only part of my theory that doesnt compute is how apple makes money. A 99$ box cant make them more than 30$...and they make a few bucks on the app, but nothing on the content....so maybe I'm totally wrong

Apple typically gets a cut of in-app purchases and there is also iAd that you are forgetting about - Apple gets a cut of that too.
post #23 of 44
Quote:
Originally Posted by monstrosity View Post

I doubt the itv will make an appearance this week. And I'm still not sold on the name "ITV" I rekon it's another decoy.

I agree
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post #24 of 44
Quote:
Originally Posted by AppleInsider View Post

Cable companies like Comcast remain one of the biggest hurdles for Apple in its attempts to grow its digital distribution business. Earlier this summer, Chief Executive Steve Jobs acknowledged that his company's Apple TV business remains a hobby because it's hard to break in to a market where consumers are used to receiving a cable box for free or $10 per month.

"The only way that's ever going to change," Jobs said, "is if you can really go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all of these different functions, and get it to consumers in a way they're willing to pay for it. And right now, there's no way to do that."

Guess what quietly showed up in the firmware refresh on my Sony Bly-ray player this weekend? Hulu Plus for $9.99 a month with content from ABC, NBC and Fox -- but no shows from CBS or any of the cable networks.

"Enjoy Hulu on the go on your iPhone, iPad and iPod touch. Support for additional devices coming soon. ... Now you can enjoy Hulu on your TV using the following devices. More Internet-enabled TVs, Blu-ray devices, game consoles and set-top boxes coming soon."

This would be a great cable replacement for about two-thirds of the shows I watch, but the other one-third of the shows (including news and sports) is enough to make me say I will definitely take a pass on this version of Hulu Plus. Still, the bargain is getting more interesting: Would I trade my $90 cable package for a $10 Hulu Plus package that forces me to give up How I Met Your Mother, Mad Men, Top Chef, Project Runway, Flipping Out, MSNBC, college football, and the Academy Awards? No, but I would probably pay $40 or $50 a month to get most of those shows and at least some live streaming programming.
post #25 of 44
Quote:
Originally Posted by sheff View Post

So I guess NBC won't plug GE christmas lights anymore during their holiday broadcasts.

On the flip side, they will plug Comcast. And I am not a fan of this monopoly. Honestly I wish Comcast gets split up like Ma Bell. Having just one choice for cable sucks. You can't stick a dish in some apartments and U-Verse just recently became available with Ridiculous pricing.

Yeah I'm not digging Comcast. I really just want the 50-Mbps Internet Access.
post #26 of 44
Quote:
Originally Posted by Sleepy Dinosaur View Post

Channels a-la-carte is the future....and a way for studios to know better who buys what and which shows/channels are mamking money. This can give the studio leverage against the cable operators who, lets be honest, are tyranical about getting what they want.

I wish that were true, but it's not. The studios/networks already have the leverage, which is why the carriage fees for ESPN and Disney Channel are astronomical and the cable operators are basically forced to take the package that the networks require.

It's the networks that don't want a la carte pricing; Disney/ABC want to make its 12 cents a month or whatever off of your cable bill for ABC Family whether you watch it or not.

For the networks to get the same revenue from a la carte pricing that they get now from subscription pricing -- which they would have to get to justify changing the pricing model -- the networks with the top shows (or the actual shows, depending on the pricing model) would be very expensive and every thing else would be very inexpensive. You could get the History Channel for pennies, but ESPN would cost you $20 a month and they'd make you subscribe to 4 or 5 ESPN channels to be able to get any of it.

We may see some version of a la carte programming on services like iTunes, Netflix and Hulu, but it's doubtful we'll see anything like that on cable anytime soon.
post #27 of 44
Quote:
Originally Posted by Daiku1 View Post

We all need to stand up against this one. Comcast already has been anticompetitive with versus programming on DirecTV. I would expect NBC being held hostage as well

Here are their coordinates:

Questions or Comments about Antitrust Issues
Contact the FTC's Bureau of Competition, and please include your day-time telephone number.
Phone: (202) 326-3300
Mail: Write to:
Office of Policy and Coordination
Room 383
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Email: antitrust@ftc.gov (Note: Email is not secure. Mark confidential information "Confidential" and send it via postal mail.)
post #28 of 44
Quote:
Originally Posted by Dr Millmoss View Post

This is part of the answer to question "should Apple buy a cable provider?" The answer is no, unless they really want to invite this kind of scrutiny, not just over the purchase, but probably over every move they make forever after. Being both a producer and deliverer of content looks a lot like vertical integration, which isn't illegal per se. But if you're big enough to potentially use the integration for anticompetitive purposes, then the regulators are going to take competitors' complaints seriously.

The answer is yes (assuming you mean studio and not cable provider...they already ARE a content provider like Comcast so it wouldn't be vertical integration) if they get lock out of significant content from everyone but ABC...and that only because Jobs is sitting on their board.

You can't lock Sony out of movie content for the PS3 even if you wanted to...why? Because they own Sony Pictures. Why did they beat Toshiba and HD-DVD with BR? In part because of the PS3 and in part because they also are a studio and could make sure that certain content was on BR.

You could make the case for them buying a cable provider to be able to provide all the set-top boxes for them. Eh. Hardly anyone advocates that but it makes them ISP and cable infrastructure stakeholders when those standards are negotiated.
post #29 of 44
Quote:
Originally Posted by jpcg View Post

They really shouldn't allow Comcast to buy NBC. I would think that keeping the content off the internet or restricting it from other cable companies would be a reason for this deal.

I am not so concerned about this deal. Comcast will kill NBC because the talent will flee in droves.

A bunch of (self-styled) artistes being owned by a cable company!? No way.
post #30 of 44
Quote:
Originally Posted by anantksundaram View Post

Here are their coordinates:

Questions or Comments about Antitrust Issues
Contact the FTC's Bureau of Competition, and please include your day-time telephone number.
Phone: (202) 326-3300
Mail: Write to:
Office of Policy and Coordination
Room 383
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Email: antitrust@ftc.gov (Note: Email is not secure. Mark confidential information "Confidential" and send it via postal mail.)

Thank you. Just emailed them a personal appeal. No evidence, just my reasoning on the matter. Probably won't do any good, but made me feel better. Maybe if enough others . . .
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post #31 of 44
The word is affect, not effect.

Affect - verb
Effect - noun
post #32 of 44
Quote:
Originally Posted by Spiffy1 View Post

Wow! That's a huge stretch. The language used to describe business issues and the government itself have been co-opted by Republicans (not necessarily conservatives) to support corporate interests above all else. So any changes you may perceive are merely window dressing at this point. This deal will likely go through without much trouble. If not, I will be pleasantly surprised.

It's not a stretch at all. Granted the DoJ and FTC were neutered under previous administrations, and we may have grown used to their complete ineffectuality, but we've seen some signs that the current administration does take an interest in the enforcement of competition laws. So their interest here might be significant.

Quote:
Originally Posted by GQB View Post

I'd love you to be right, but I've not seen one assessment indicating that there's the slightest chance of disapproval, and there's only 1 senator leading the charge against it.... Go Al!

I didn't make a claim that the acquisition would be disapproved, which rarely happens. What I did say is that the fact that the DoJ is looking into competition issues in this matter suggests that it's got their attention and is perhaps more likely to take related complaints seriously in the future.

Quote:
Originally Posted by nht View Post

The answer is yes (assuming you mean studio and not cable provider...they already ARE a content provider like Comcast so it wouldn't be vertical integration) if they get lock out of significant content from everyone but ABC...and that only because Jobs is sitting on their board.

You can't lock Sony out of movie content for the PS3 even if you wanted to...why? Because they own Sony Pictures. Why did they beat Toshiba and HD-DVD with BR? In part because of the PS3 and in part because they also are a studio and could make sure that certain content was on BR.

You could make the case for them buying a cable provider to be able to provide all the set-top boxes for them. Eh. Hardly anyone advocates that but it makes them ISP and cable infrastructure stakeholders when those standards are negotiated.

Apple is already a content provider? Maybe that's not what you meant. They are only a retailer at this point. My point on Apple becoming a cable provider (or an entertainment company owner) is that it creates vertical integration that can not only invite government scrutiny but also alienate potential partners who don't like to work with a company which is also a competitor.
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post #33 of 44
Quote:
Originally Posted by Robin Huber View Post

Thank you. Just emailed them a personal appeal. No evidence, just my reasoning on the matter. Probably won't do any good, but made me feel better. Maybe if enough others . . .

Actually, they are required to take it seriously.

Indeed, more of us should express our opinions in such public comment settings: usually, only the lobbyists and lawyers do.
post #34 of 44
Once the studios figure out that they can skip paying cable companies and sell directly to customers who want it, when they want it, CableTV is going to be on serious straights.

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post #35 of 44
Quote:
Originally Posted by canucklehead View Post

The word is affect, not effect.

Affect - verb
Effect - noun

Wrong. Effect is used correctly in the title.

Also, for what it's worth, affect and effect can both be used as a verb and as a noun.
post #36 of 44
Quote:
Originally Posted by anantksundaram View Post

Actually, they are required to take it seriously.

Indeed, more of us should express our opinions in such public comment settings: usually, only the lobbyists and lawyers do.

Thanks very much for your posts on this. You're absolutely right, more of us should express our opinions in the official channels rather than just on forums such as this. It's easy to be cynical and just complain that there is nothing we can do, but if enough of us start to do something, things will change.

I will be writing to them in the morning.
post #37 of 44
Quote:
Originally Posted by satcomer View Post

Once the studios figure out that they can skip paying cable companies and sell directly to customers who want it, when they want it, CableTV is going to be on serious straights.

Wrong.
First, the cable/satellite companies pay the studios. The studios do not pay to have their shows distributed.

Second, the studios charge the cable/satellite companies for every system subscriber not just the subscribers who want their channels. Your al la carte system would mean fewer subscribers, thus less money.

Third, it is the studios that mandate the system bundles and at what tiers that their different channels will be provided in. By selling directly to the final consumer, as opposed to dealing with the cable/satellite middleman, they will more likely be told to take a hike when they try to impose their bundling crap on us who actually pay the bill. Again less money.

It is in the studios interest to keep the cable/satellite/broadcaster middlemen in place. They not only will keep the gravy train in place but it is the middlemen who take the big risks. They not only have to pay the studios for their content but have to find and keep the subscribers who actually pay the bills.
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post #38 of 44
Comcast giving preferential treatment to NBC content over their pipes? Yeah, and that whole net neutrality law thing isn't needed.
post #39 of 44
Quote:
Originally Posted by Cubert View Post

Comcast giving preferential treatment to NBC content over their pipes? Yeah, and that whole net neutrality law thing isn't needed.

The less government is involved, the better. Let competition sort it out instead. If collusion becomes widespread, then government should step in and establish new competitive rules.

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post #40 of 44
Quote:
Originally Posted by Dr Millmoss View Post

Apple is already a content provider? Maybe that's not what you meant. They are only a retailer at this point. My point on Apple becoming a cable provider (or an entertainment company owner) is that it creates vertical integration that can not only invite government scrutiny but also alienate potential partners who don't like to work with a company which is also a competitor.

Sorry...content distributer vs content producer is what I meant. Comcast also retails content as well as PPV and paid VOD.

Government scrutiny is far better than getting shut out of the market. So is alienating partners that are not cooperating anyway by withholding content. As I stated, it hasn't hurt Sony all that much tactically and they have used it to significant strategic advantage. Comcast will likely buy NBC and use it to its competitive advantage vs companies that do not produce content.

Google owning lots of dark fiber and building out a trial 1GB internet service hasn't put it in any worse position with Verizon as a partner.

Would you prefer to control as much of your own destiny as possible or leave it to government regulators to keep the field level for you? Especially if you're a company executing as well as Apple.
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