Thursday, January 20, 2011, AM | Leave Comment
Federal regulators on Tuesday approved Comcast’s $30 billion acquisition of NBC Universal. Camcast is the biggest cable company in the States (hardware) and NBC Universal has one of the biggest libraries of TV shows and movies (software). Together, the companies have 16.7 million broadband subscribers, about 23 million cable customers and dozens of lucrative and profitable channels such as USA, Bravo, MSNBC and CNBC.
The Justice Department also announced its approval with conditions aimed at keeping Comcast-NBCU from quashing competition from other networks and Internet providers.
FCC Put Conditions On The Joint Venture
Comcast promised to contribute more local news and informational programming on some channels, more programming aimed at children and minorities, and $9.95 broadband Internet service for low-income households.
Online video industry has created a universe of its own. More and more consumers jump onto the Web for their video entertainment and news. There are some conditions that are applied to specific shows. For example, the FCC required Comcast to offer Internet versions of its content such as “Saturday Night Live” and “Top Chef” to online distributors of video at the same terms and conditions it gives to cable and satellite providers.
Ma Bell was considered Monopoly
Effective January 1, 1984 when Congress broke the Bell System monopoly, often called American Telephone & Telegraph, when Sprint and the then MCI complained with such a high-pitched voice that Congress could bear it no more and they were forced to take action. The shredded pieces were converted into seven independent Regional Holding Companies.
Prior to 1984, folks were unable to buy their own phones. We had to rent it from Ma Bell. Life was simple. Phone was simple. Service was good and it had to be good. There was nothing else but land-line phone.
The break-up created pieces of the puzzle scattered all over America. Then someone came up with the idea of putting all the pieces together and converting them into regional monopolies. New England Bell, Bell Atlantic and God knows what else were put together back again and for some odd reason, one of the BIG pieces was called Verizon.
It has been reported by many that the Justice Department had determined that the company had grown too big and therefore filed suit under the Sherman Antitrust Act in 1974. In my opinion, it was the high-pitched note coming out of the mouths of MCI and Sprint that did the trick of breaking up Ma Bell. Internal forces seldom work. It’s the external forces that can force an individual or organization to take action.
Verizon is a monopoly of its own with more than 93 million subscribers. NBC got together with Universal to form NBC Universal. That created a behemoth of entertainment resources. Comcast is basically the conveyor of the message, a hardware company if you will. It needed exclusive content to flow through their cable. NBC with its TV shows and made for TV movies and Universal for its big screen movies, Comcast must be in heaven.
FCC Blessed Acquisition
The blessing on the part of FCC with conditions put forth on the acquisition is, in my opinion, a lot of BS. According to media report, FCC knew about Bernie Madoff and how he juggled people’s money back in late 1990s. But did it do anything? Ten years later, Bernie’s son blew the whistle with a high-pitch note that FCC could bear it no more.
Two Kinds of Laws
I have said it before and I’ll say it again. There are two kinds of laws in a nation. One on a piece of paper and the other when it is acted upon with unprejudiced rigor and vigor. The latter very seldom happens. The law-enforcing authorities must be somehow forced to take action. When the son blew the whistle, FCC sprang into action and not before.
What’s in it for the Consumers
Only time would tell. Monopolization is no good for start up companies. They can’t get it up – I mean their marketing – to competitive levels. Consumers are screwed one way or another. They don’t count. They never did. Look at the ad for Hulu in the video. It says: “Visit hulu.com today and start watching for free.” That’s not entirely true. Most of the TV shows and Movies are subscription-based – $7.95 a month. hulu.com is a joint venture of NBC Universal, Disney and a couple of other such entertainment giants.
In a Nutshell
All we need is a high-pitch note and so loud that the authorities are forced to hear. In order to avoid hearing the loud voice, they must be on alert all the time without someone blowing the whistle. They must be trained to be proactive than reactive. Folks can search for more information on the topic at hand in their favorite search engine.