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Let Comcast-NBC/Universal Merge

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Let Comcast-NBC/Universal Merge

Statement of Wayne Crews, Director of Technology Studies

Tomorrow the House Energy and Commerce Subcommittee on Communications, Technology and the Internet will conduct a field hearing questioning “Who Benefits?” from the proposed Comcast-NBC Universal merger.

Washington, D.C., July 7, 2010—Tomorrow the House Energy and Commerce Subcommittee on Communications, Technology and the Internet will conduct a field hearing questioning “Who Benefits?” from the proposed Comcast-NBC Universal merger.

Critics say the merger is “poised to fundamentally alter the landscape of the U.S. media market.” That is true. It is also true that such an ever-changing landscape is an inevitable result of any dynamic market. For that reason, to block a voluntary merger means to forcibly keep the market stagnant, while showering corporate welfare upon competitors to the merging firms—that is, those who otherwise would be forced to compete. 

When a marketplace is not constantly being “fundamentally altered,” consumers are getting ripped off. The greatest hazard of blocking ventures like the proposed Comcast-NBC merger is that it makes competitive responses to it unnecessary.

The Comcast-NBC merger represents one element of an evolving communications marketplace that is increasingly magnifying consumer choice and the ability to customize information—not just consumed information like movies on demand, but also that which individuals themselves create or assemble for distribution to others. That hyper-personalization legitimately coexists with giant media enterprises.

Here’s another way of looking at it: Most of the world’s videos and movies haven’t been shot yet, and most of tomorrow’s communications infrastructure is yet to be built.

Contrary to their monikers, Free Press and Consumers Union act counter both freedom of choice and the interests of consumers. Their command-and-control regulatory approach toward the media marketplace undermines the very process of media wealth creation. Policies advocated by such groups would deprive the marketplace and consumers of the necessary competitive responses to the so-called monopolist’s actions—which in the end produce the discipline the market needs.

Media companies, potentially Comcast-NBC among them, do not exist in a vacuum. They must constantly contend with upstream suppliers, downstream business customers, joint-venture partners, individual consumers, investors, the broader media sector, domestic and global competitors—all of whom help to discipline any errant behavior.  By contrast, antitrust regulation short-circuits this dynamic of competition, forestalls the opening of new creative avenues, and hurts consumers much more than a mere merger could ever do.

The irony in some consumer advocates’ opposition to media mergers is that they want government to control the size and scope of media voices, which inevitably would be less than would otherwise emerge in a more media-saturated world. They call this outrage “diversity.” Yet Comcast-NBC would wield no power of censorship; that’s government’s domain, ironically cheered on by Free Press and the like.

Both Comcast and NBC operate in intensely competitive markets for news and entertainment content and infrastructure. Policy makers cause incalculable damage and destabilize entire industries—not just particular firms—when they undermine network industries’ efforts to orient themselves to attain the scale appropriate to meeting tomorrow’s global communications challenges.,

Antitrust vetoes market decisions through artificial constraints and interference, thus  placing productive firms on trajectories the market never intended and upending the process of “information wealth” creation.

In addition to a pro-First Amendment stance, the Federal Communications Commission’s primary focus should be on emphasizing the separation of state and communications, by aggressively liberalizing the electromagnetic spectrum for the communications entrepreneurs of the future.

See the following by Wayne Crews for further detail:  

Comment to FCC on “The Future of Media” May 7, 2010.

Comment to FCC on Net Neutrality and Preserving the Open Internet, January 14, 2010. 

Comment to FCC on XM-Sirius Merger. July 9, 2007.

Communications Without Commissions (with Braden Cox), October 18, 2005.

"A Defense of Media Monopoly," Communications Lawyer, Vol. 23, No. 3, Fall 2003.

Antitrust Policy as Corporate Welfare, July 1997.

CEI is a non-profit, non-partisan public interest group that studies the intersection of regulation, risk, and markets.