You might want to sit down, because this could come as a surprise: Comcast is doing something bad. According to the American Cable Association, Comcast has been using its ownership of “must-have” programming, like NBC regional Sports channels, to quash the spread of so-called “skinny” cable bundles from other cable companies.
In other words, Comcast is accused of abusing its position as a content owner to kill competition in the home cable market. That might sound like the kind of grossly anti-competitive behavior that regulators should be vigorously cracking down on, but if you still believe that, you’re probably new here.
The American Cable Association, an organization representing 800 small cable companies nationwide, make the comments as a response to an FCC request for comments on the 19th “Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming.”
According to the ACA, Comcast is forcing small cable companies to bundle NBC Sports into any cable package that reaches more than 15% of a customer’s user base. Sports channels are often the most expensive component of a cable bundle, so the recent trend of offering “skinny” cable that doesn’t include sports has been popular. Of course, the rise in popularity of skinny bundles hasn’t been good for Comcast’s bottom line, as it has traditionally made a killing selling sports channels to other cable companies via NBC Universal.
“Many consumers that want to opt out of the big cable bundle in favor of a less expensive alternative are gravitating to a bundle that includes just the basic cable tier (essentially local TV stations) plus broadband Internet access and then relying on over-the-top video services to gain access to a more limited amount of cable programming more narrowly tailored to their specific interests,” ACA President and CEO Matthew M. Polka said in a statement.
“Comcast, it seems, is standing in the way of ACA members that want to help their customers escape the burdens of the big and expensive expanded basic bundle of channels, while at the same time aggressively marketing a bundle of networks very similar to the broadcast basic tier to its own customers through its new ‘Instant TV’ service.”
Taking the ACA’s comments at face value, this looks like exactly the kind of anti-competitive practices people were worried about when Comcast took full control of NBC Universal in 2013. More to the point, it’s going to get worse when/if AT&T completes its acquisition of Time Warner Inc. At that point, you’ll have another massive cable company with control over “key” programming like HBO, TNS, TNT, and CNN.
If all the content is controlled by cable companies that are making a killing off their current price strategy, there’s almost no way that cord-cutting can really make a difference. “Minimum penetration policies,” which force cable companies to include the most lucrative channels in the bulk of their bundles, let Comcast and the like indirectly set prices for cable companies all across the nation, which prevents smaller cable companies from coming in and undercutting Comcast’s own cable business. It’s a vicious circle, and so long as the biggest cable companies are also the biggest content owners, there’s no end in sight.
