Problems in achieving the merger
Essentially the critics presented 2 arguments against the acquisition of NBC universal by Comcast. Firstly they proposed the competitive harm from a Vertical Transaction. A vertical merger can harm competition by facilitating exclusion or collusion. Free Press argued that Comcast’s collaborative effort with NBC would stifle competition in online video (TV Everywhere model) by restricting where, the vast amount of “must-see” NBC-owned content can be offered, and charge higher rates to television providers for accessing NBC-owned networks. Thus rising to the level of an antitrust violation by way of intentionally discouraging competition and acting as concierge to content on the Web.
Second argument was that Comcast …show more content…
There was an apprehension that if Department Of Justice opposed the deal then Comcast would have had to fight a lawsuit aimed at blocking the acquisition. This would have led to abandoning its proposed merger, almost similarly as AT&T surrendered its efforts to buy T-Mobile in 2011 when regulators signaled they would block that deal.
Forsaking its bid to acquire NBCU from Time Warner Cable, however, would have been a enormous setback for Comcast and would have ended a potential boom period for telecom consolidation.
The transaction under the review by department of justice forged a uniquely vertically integrated media and entertainment company that aimed at controlling both the largest cable programming distribution network in the US and one of the largest creators of television programming and feature films in the US. The primary concern of the antitrust attorneys was related to the vertical issues, as horizontally both parties were aligned and were contributing programming assets to the venture. The issue revolved around the effect on competition caused by the ownership of a significant programming content partner by a large cable …show more content…
The integrated firm would enable Comcast to deter the development of Hulu’s business by hampering major strategic actions. There was an impeding threat from Comcast to significantly stifle the OVDs in their nascent stages of business, before they even have a chance to be able to become significant competitors to Comcast.
2. The already existing competitive MVPDs (Multichannel Video Programming Distributors) were also on the edge of being adversely affected by the transaction. When NBCU was a under GE, it had greater incentive to make its “most wanted” content available in maximum ways (cable, satellite, online) so as to increase its licensing fees and achieve greater advertising revenues. But with the Joint venture in place, this incentive would be replaced by the profit maximizing strategy of withholding important content with rivals or charge extra/ premium super competitive fees from them.
Dept. of Justice issued its consent decree almost in sync with the FCCs order of approval. The FCCs conditions took the case of MVPDs remedies in detail, with proving for arbitration process. So DOJ focused on the OVDs
Essentially the critics presented 2 arguments against the acquisition of NBC universal by Comcast. Firstly they proposed the competitive harm from a Vertical Transaction. A vertical merger can harm competition by facilitating exclusion or collusion. Free Press argued that Comcast’s collaborative effort with NBC would stifle competition in online video (TV Everywhere model) by restricting where, the vast amount of “must-see” NBC-owned content can be offered, and charge higher rates to television providers for accessing NBC-owned networks. Thus rising to the level of an antitrust violation by way of intentionally discouraging competition and acting as concierge to content on the Web.
Second argument was that Comcast …show more content…
There was an apprehension that if Department Of Justice opposed the deal then Comcast would have had to fight a lawsuit aimed at blocking the acquisition. This would have led to abandoning its proposed merger, almost similarly as AT&T surrendered its efforts to buy T-Mobile in 2011 when regulators signaled they would block that deal.
Forsaking its bid to acquire NBCU from Time Warner Cable, however, would have been a enormous setback for Comcast and would have ended a potential boom period for telecom consolidation.
The transaction under the review by department of justice forged a uniquely vertically integrated media and entertainment company that aimed at controlling both the largest cable programming distribution network in the US and one of the largest creators of television programming and feature films in the US. The primary concern of the antitrust attorneys was related to the vertical issues, as horizontally both parties were aligned and were contributing programming assets to the venture. The issue revolved around the effect on competition caused by the ownership of a significant programming content partner by a large cable …show more content…
The integrated firm would enable Comcast to deter the development of Hulu’s business by hampering major strategic actions. There was an impeding threat from Comcast to significantly stifle the OVDs in their nascent stages of business, before they even have a chance to be able to become significant competitors to Comcast.
2. The already existing competitive MVPDs (Multichannel Video Programming Distributors) were also on the edge of being adversely affected by the transaction. When NBCU was a under GE, it had greater incentive to make its “most wanted” content available in maximum ways (cable, satellite, online) so as to increase its licensing fees and achieve greater advertising revenues. But with the Joint venture in place, this incentive would be replaced by the profit maximizing strategy of withholding important content with rivals or charge extra/ premium super competitive fees from them.
Dept. of Justice issued its consent decree almost in sync with the FCCs order of approval. The FCCs conditions took the case of MVPDs remedies in detail, with proving for arbitration process. So DOJ focused on the OVDs