NBC and Comcast Merge and That’s … O.K.

Let the record show that Al Franken, freshman senator from Minnesota, bears little resemblance to Al Franken, onetime Saturday Night Live funnyman. At an otherwise genteel subcommittee grilling of the top executives from NBC Universal and Comcast over their proposed media mega-merger last week, Mr. Franken had none of the self-doubt of his famously sheepish SNL character, Stuart Smalley. Instead, he delivered an aggressive “don’t play a playa” message when it came to voluntary concessions NBC and Comcast had made to help seal the deal. “You’ll have to excuse me if I don’t trust these promises,” Mr. Franken said. “And that’s from experience in this business.”

Turning to Brian Roberts, the CEO of Comcast, Mr. Franken accused him of coming to his office the previous week and spinning him about rules that govern which channels are carried by cable and how consumers access him. It’s an abstruse point, but essentially Mr. Franken thought Mr. Roberts was praising rules designed to protect consumers from mega-mergers like this one while simultaneously challenging the same rules on the basis that they violate the First Amendment. “Looking to get approval for this merger, you sat there in my office and told me to my face that these rules would protect consumers,” Mr. Franken told Mr. Roberts.

“And then, to add insult to injury, I asked you right after you made this assertion in my office whether you were aware that your company had litigated this, and you said, ‘I don’t know.’ And so I said, ‘Well, why don’t we ask one of your lawyers?’ Because you had a number of lawyers there.” And we turned to your lawyer and your lawyer said, ‘Yeah, yeah, we did that; we did this.’”

When Mr. Roberts tried to respond, Mr. Franken cut him off. “Look, I think Minnesotans have their answers. Thank you very much.”

Mr. Franken wasn’t done yet. He then turned to NBC and its chief, Jeff Zucker—“look, we’re friends”—and said he had worked with Mr. Zucker’s “lovely” wife, Caryn, at SNL, “and I loved my time at NBC, I want you to know that.” Those caveats aside, Mr. Franken had a bee in his bonnet about regulatory changes in the 1990s that allowed production studios and TV networks to be owned by the same company, leading to a wave of consolidation and a heavy reliance on studio-owned product despite promises to the commission that independent producers would not be shut out. By 1992, Mr. Franken said, the majority of programming on NBC was its own. Mr. Zucker didn’t come to D.C. to rehash a 20-year-old debate, and suggested that it might be more relevant to talk about “what’s happening today.” In fact, he noted, NBC had just ordered a bunch of pilots for new shows for next year, and roughly 40 percent of them were projects that the network has no financial interest in. Mr. Franken had none of it, invoking the Jay Leno debacle: “I think what you did was put an NBC-produced show on at 10 for five nights a week, is what I think you did.”

It was all over very quickly. A snowstorm was coming, and there will be a year or so of further regulatory grandstanding and wrangling before the NBC-Comcast deal is done. The reality is that there is little basis for regulators to prevent Comcast and NBC from combining. From an antitrust perspective, the two companies don’t really compete.

But Mr. Franken was tapping into a bigger, more ingrained fear: that the bigger these media companies get, the less weight consumers, or viewers, will have in influencing what they do.

That can be hard to argue, though, given that past media mega-mergers have generated very mixed results. Successes like Disney–Capital Cities and Time Warner–Turner are overshadowed by flops like Viacom-CBS, AOL–Time Warner and (as noted last week) Vivendi-Universal. With their merger, Comcast-NBC will control roughly 24 percent of cable subscribers in the country and account for 12 percent of what is viewed on television.

But this merger is really about what television is turning into; Mr. Roberts noted that Comcast is spending $1 billion on a superfast Internet service called wideband—forget broadband!—and in this new era, Mr. Roberts promised the new company would be “reliable stewards for the national treasures of NBC and NBC News.” Apparently, Minnesotans will be watching with a wary eye.



NBC and Comcast Merge and That’s … O.K.