Now that the Federal Communications Commission has approved the
acquisition of 51 percent of NBC-Universal from General Electric (
GE
) by Comcast (
CMCSA
), some are raising tough questions about the implications for the
future of the open web.
Though the two companies have the go-ahead from both the Department
of Justice and the FCC, the new media conglomerate has a laundry
list of rules and obligations, including a commitment to provide
the poor with cheap broadband service, rules to prevent
discrimination against particular types of traffic and limits on
Comcast's ability to put pressure on the video-sharing site Hulu.
Hulu is an interesting test case, because it and its business model
represent one of the most significant threats to Comcast's
old-school subscription cable model. Rather than paying Comcast a
subscription to access all its shows, customers can pick and choose
à la carte. Because NBC owns a significant stake in Hulu,
along with Fox, ABC and Providence Equity Partners, the fear is
that Comcast would use its stake to pull shows from the service or
even slow down Hulu traffic on its broadband networks to make all
content harder to watch.
Another company that's looking askance at the merger is Netflix (
NFLX
), which is increasingly pushing its customers away from DVDs and
its ubiquitous red envelopes and towards streaming video. While
both distribution models threatened Comcast's core cable business,
the streaming model actually uses Comcast's web infrastructure,
which might tempt the company to put up technological or financial
roadblocks between Netflix and its customers.
The Justice Department and the FCC have basically banned Comcast
from undertaking these actions, it's true, and there are some who
view the list of conditions imposed upon the merger as onerous and
excessive. It may be that Comcast will play nice with its
competition - but the stakes are high, and there's a lot of money
to be made or lost.
