DOJ could force Comcast to offer NBCUniversal content for Apple's Web television service
Despite reportedly refusing to engage in discussions to join Apple's rumored web television initiative, cable provider Comcast may have no choice but to eventually capitulate thanks to regulatory concessions the company agreed to in 2011 as part of its takeover of NBCUniversal.
Under the final judgement, Comcast must treat online video services as essentially equal to cable companies. Comcast is required to give those services access to the same NBCUniversal content that it sells to cable providers, under the same terms and conditions.
Additionally, if an online video service strikes a deal with one of NBC's peers --?such as CBS --?Comcast is obligated to license "comparable" content at "economically comparable" rates. For example, if Apple's new service were to carry first-run CBS programming, Comcast must makes its own first-run programming available at roughly the same rates as those negotiated between Apple and CBS.
There are some restrictions on what can be considered "comparable" programming. Carrying reruns of CBS sitcoms would not grant Apple access to sports content from NBCUniversal, for instance, and Comcast is allowed to force online video services to carry --?and pay for --?its entire channel lineup if they also carry "substantially all" of a peer's channel lineup.
If Comcast is unable to come to terms with Apple, the iPhone maker can petition the Department of Justice for permission to enter commercial arbitration. While the DOJ says they will generally defer to the Federal Communications Commission's established rules for arbitration in these cases, they do reserve the right "to permit arbitration under this Final Judgment to advance the competitive objectives of this Final Judgment" --?in other words, the DOJ can push Comcast into arbitration if it feels that the company is being unfair in its licensing approach.
Apple is currently rumored to be in talks with Disney, CBS, 20th Century Fox, Discovery, and Viacom to bring their content to a new streaming service that would bow this fall. Pricing is thought to fall between $20 and $40 per month, and the company is reportedly offering to share viewership data with content owners to entice them to cooperate.
Under the final judgement, Comcast must treat online video services as essentially equal to cable companies. Comcast is required to give those services access to the same NBCUniversal content that it sells to cable providers, under the same terms and conditions.
Additionally, if an online video service strikes a deal with one of NBC's peers --?such as CBS --?Comcast is obligated to license "comparable" content at "economically comparable" rates. For example, if Apple's new service were to carry first-run CBS programming, Comcast must makes its own first-run programming available at roughly the same rates as those negotiated between Apple and CBS.
There are some restrictions on what can be considered "comparable" programming. Carrying reruns of CBS sitcoms would not grant Apple access to sports content from NBCUniversal, for instance, and Comcast is allowed to force online video services to carry --?and pay for --?its entire channel lineup if they also carry "substantially all" of a peer's channel lineup.
If Comcast is unable to come to terms with Apple, the iPhone maker can petition the Department of Justice for permission to enter commercial arbitration. While the DOJ says they will generally defer to the Federal Communications Commission's established rules for arbitration in these cases, they do reserve the right "to permit arbitration under this Final Judgment to advance the competitive objectives of this Final Judgment" --?in other words, the DOJ can push Comcast into arbitration if it feels that the company is being unfair in its licensing approach.
Apple is currently rumored to be in talks with Disney, CBS, 20th Century Fox, Discovery, and Viacom to bring their content to a new streaming service that would bow this fall. Pricing is thought to fall between $20 and $40 per month, and the company is reportedly offering to share viewership data with content owners to entice them to cooperate.
Comments
Yeah, I don’t like this at all. No one should be forced to sell something if or where they don’t want to.
Nor do I like content creators being content providers.
I disagree. There should be much less regulation against these kinds of mergers, because these businesses are far too insulated from the rigors of competition as it is now. There is no monopoly at work here, unless otherwise caused by local or Federal government having made sweetheart deals keeping competitors shut out.
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I there anyone out there that thought allowing a cable provider to purchase a content provider would result in cheaper prices for the consumer? Ugh!
Thanks Apple. Maybe we'll get NBCSports (Formula one) on AppleTV now!
P.S. "According to a new book by Pulitzer prize-winning reporter David Cay Johnson, Americans pay four times the amount for net access than the French and 38 times more for net access than the Japanese. What's worse is that us Yanks rank 29th in the world for net speed. Something isn't adding up here."
Source: http://www.cinemablend.com/games/Americans-Pay-38-Times-More-Internet-Than-Japan-Ranks-29th-Internet-Speeds-47570.html
Yeah, I don’t like this at all. No one should be forced to sell something if or where they don’t want to.
Nor do I like content creators being content providers.
Which one do you like less?
There is no monopoly at work here, unless otherwise caused by local or Federal government having made sweetheart deals keeping competitors shut out.
Whatever the reason for its existence, it would be silly for anyone to suggest that Comcast is not a monopoly in a vast region in which it operates. So what if it's the federal or local government that granted or enabled it?
What the government gives, it can take away. Sauce for the goose.... etc...
The latest episode of Heroes is not.
Yeah, I don’t like this at all. No one should be forced to sell something if or where they don’t want to.
Comcast agreed to the terms of the deal so now they have to live up to it.
So utility companies can choose to not sell Water to certain customers? Or electricity? Even if they can pay the bill? Or hospitals can choose not to provide services to certain customers? Really?
The flaw in that theory is that water/hospitals are essential to life.
The latest episode of Heroes is not.
Most reasonable people would argue that a cable connection is an essential service too. This is how people get on the internet, receive and send information, receive and make phone calls, access their work and educational services, etc. The fact that you own the pipe should not enable you to control in any way what is being sent through it.
In fact, that is precisely what the FCC is currently doing with its net neutrality rules.
IMHO, Apple does not have to go this particular route at all.
Several years ago, NBC decided to pull all of its television shows from iTunes because Apple would not allow it to charge more than $1.99 per television show. NBC felt its television shows were worth more than $1.99 per episode. At the time, I was watching the NBC show, Heroes, and buying the show from iTunes for $1.99. I felt the show was good, but not worth more than $1.99 per episode.
When NBC pulled its television shows from iTunes, I stopped watching Heroes on television. NBC felt too arrogant to me, which forced me to evaluate why I was supporting the company. When NBC returned to iTunes with shows costing $1.99 per episode, I returned to purchasing Heroes, but never returned to watching NBC on television. Even though I was just one person out of millions, I decided NBC needed me much more than I needed NBC.
Paying $1.99 for standard definition or $2.99 of high definition episodes seems reasonable to me. If NBC feels its shows are worth more than that, Apple does not have to cater to NBC. Apple can just move forward with its TV plans without NBC. NBC will eventually come to Apple.
Most reasonable people would argue that a cable connection is an essential service too. This is how people get on the internet, receive and send information, receive and make phone calls, access their work and educational services, etc. The fact that you own the pipe should not enable you to control in any way what is being sent through it.
In fact, that is precisely what the FCC is currently doing with its net neutrality rules.
Cable service perhaps. Cable television I would argue the contrary. Esp where Fox News is concerned.
Comcast agreed to the terms of the deal so now they have to live up to it.
Yeah but is using CBS programming rates a good thing? CBS has been increasing their retransmission consent fees and have been in lots of disputes with cable providers over these fee increases.
You can bet that if the shoe was on the other foot, Comcast would push for the broadest possible interpretation of the signed agreement.
Stuff 'em, I say.
And i pray that doj intervenes and blocks comcast buying Time warner!
It will be a disaster if it goes through!
Not so vertual.. In many areas literal !
Broadcast TV (NBC) is a utility. All our tax dollars paid for that infrastructure. Those should be available to all who can pay for it.
Our tax dollars most certainly did NOT pay for the broadcasting facilities nor the production facilities that NBC uses: they did, private corporations, financed through their advertising income. Cable also was not paid for by tax dollars. In actuality the argument for the private companies to invest in that cable infrastructure construction was the monopoly benefit to make the deal attractive.
Its so entertaining to watch the Libertarian types (most of whom no doubt would love cable cutting) who live in a fantasy world where there is competition (almost nose-spit my coke at the comment that there was no cable monopoly) and the almighty free market is the all knowing arbiter of justice.
I have to admire the masochistic faith in corporations that y'all seem to embrace. I'll take DOJ as my advocate any day.
Not only should the NBC merger have been denied, but Comcast/Viacom need to be split up to separate content from pipes.