ACA Anticompetitive Comcast Complaint May Get DOJ Attention, Not Action

Trump "clearly understands" the same anticompetitive concerns ACA and others have raised about Comcast, President Matt Polka said in a statement Tuesday. Concern about consumer harms from Comcast/NBCU "spans the political spectrum," he said, noting Sen. Richard Blumenthal, D-Conn., last year asking the Antitrust Division investigate possible anticompetitive threats from Comcast/NBCU (see 1712130058), and Americans for Limited Government urging similarly in September (see 1809270053). "Consumer choice and robust competition are at stake with an 'unleashed' Comcast-NBCU -- and the DOJ needs to open an investigation to ensure that Americans and our economy are not sacrificed to Comcast-NBCU’s selfish interests," Polka said. Trump tweeted Monday about ACA's allegations.

Comcast/NBCU "poses a much greater threat to competition" than AT&T/Time Warner, ACA wrote antitrust chief Makan Delrahim dated Nov. 6 and made public Monday. Its concerns include Comcast's ownership of must-have local programming like 11 NB TV stations and seven NBC regional sports networks, and that Comcast might restrict rival cable distributors' access to Hulu while using it as a competitor to cable.

Comcast called ACA's letter "without merit" and said it "constitutes an inappropriate attempt to gain leverage in the commercial marketplace." Video programming and distribution markets "are incredibly competitive ... [and Comcast/NBCU is] competing in this dynamic environment the way we always have -- by continuing to innovate and conducting our business in compliance with antitrust laws and other legal requirements," it said. The operator cited its integration of Netflix and YouTube into its X1 platform and NBCU content being licensed by Netflix, Hulu "and hundreds of other traditional and over-the-top providers."

Comcast could be in a tough spot politically since it has the enmity of Trump while progressives like Sen. Elizabeth Warren, D-Mass., have been pushing for stronger antitrust enforcement, said an antitrust expert. Comcast could face a hard time with the agency because Justice has embraced a theory of increased danger of foreclosure by a company that has both content and distribution wings.

DOJ brought its AT&T/Time Warner complaint in large part based on the position the Comcast/NBCU consent decree wasn't working, and the agency is likely receptive to delving into whether dispute resolution and other parts of the consent decree are effective, said Glass, formerly with the Antitrust Division. He said if Comcast is engaging in anticompetitive conduct, an investigation and prosecution could be done outside the deal context but looking through the lens of activity in which Comcast in 2018 is engaged. He said historically, presidential preference in undertaking an investigation wouldn't matter to the division because such activity ultimately has to be proven to a judge.

There's slim chance of the letter resulting in any DOJ action, despite the presidential tweet, said a former DOJ antitrust lawyer. ACA's best hope is that it makes Comcast exercise caution since it could feel it's under the microscope, which still would be useful for the group's small and mid-sized cable members, the lawyer said. He said the agency looked at Comcast behavior on Hulu when the consent decree was in effect, but it went nowhere because of the hurdles of bringing a winnable lawsuit.

Cowen analyst Paul Gallant wrote investors Monday that DOJ likely will open an investigation, which could affect how the company deals with its competitors and programming buyers. But Delrahim "seems dead set against behavioral conditions and breaking up an already-approved merger isn't likely," he said.

DOJ Notebook

Sinclair, Raycom, Tribune, Meredith, Griffin and Dreamcatcher won't directly or indirectly share competitively sensitive information on advertising sales "pacing" data, DOJ said Tuesday. It announced a settlement resolving litigation brought against the six, as expected (see 1811070056). Pacing data compares a station's revenue booked for a particular period with what was booked at the same time the previous year, DOJ said. It said a seven-year ban on data sharing, as well as the broadcast groups' cooperation in its ongoing investigation and their adoption of antitrust compliance and reporting measures, will resolve its antitrust concern. It said the ban will apply to stations owned by the six even if sold.

“Advertisers rely on competition among owners of broadcast television stations to obtain reasonable advertising rates, but this unlawful sharing of information lessened that competition and thereby harmed the local businesses and the consumers," said Delrahim. The agency said the pacing information swap let the broadcasters better know whether competitors were likely to change spot advertising prices, which then affected their own pricing strategies and negotiations with advertisers.