Over the last couple of years, Comcast as gradually taken control of NBC Universal. The process has come with relatively little economic problems for Comcast. Unfortunately, conditions regarding Comcast's functional acquisition of NBC Universal have still not been determined which makes future costs unsure. This is especially vital in the area of online videos.
Various public-interest groups and satellite-TV firms have requested the Federal Communications Commission to guarantee that the merged Comcast-NBC Universal not be allowed to withhold its content from rivals online. Withholding media content from rivals would allow Comcast to virtually control a large share of the online television market while forcing competitors to air less popular and less viewed shows on their website. A regulation against Comcast could be problematic for Comcast. Investor confidence could potentially tank as rivals such as Netflix and Sezmi could capitalize on online video services. Sezmi is uniquely important because it is a venture-capital-backed broadband video service that has the ability to directly compete with cable. Allowing these companies access to Comcast's online media would undermine Comcast's ability to effectively protect its core-cable-TV business.
The outcome of this decision from the FCC could have some drastic effects on these industries. If Comcast is required to allow other companies to use their media, this could undermine their investor confidence and could stifle their growth as a company. Additionally, other companies would become larger competitors and in a worst-case scenario, undermine Comcast's hold on online-media.
Cite:
http://online.wsj.com/article/SB10001424052748704116004575522141414844222.html?mod=WSJ_Tech_LEFTTopNews
I'm really confused by the FCC's decision (not how you explained it...just the decision in general). Why do you think the FCC has a interest in forcing Comcast to share content?
ReplyDeleteIf this happens, if Comcast cuts into its own core cable business, do you think they could make it back in other ways, somehow capitalizing on the online market?
This is a great question. The reason the FCC is against Comcast is due to its ideological belief on net neutrality. Just to clarify, net neutrality is the belief that there an equal access to internet without restrictions. A facet of this is represented within the Comcast case. Comcast's exclusivity would allow it to slow internet traffic onto their website. Additionally, other online media sites wouldn't have access to this content which goes against the thesis of net neutrality.
ReplyDeleteThis belief is also represented in the consistent push the FCC and on a small level, the Obama administration, has had towards universal broadband penetration. Many areas throughout the U.S. don't have have access to internet which has caused a digital divide. Many proponents for universal broadband indicate that as the digital divide expands, it undermines the ability of certain populations from effectively engaging in the democratic process. As information regarding political issues and voting exists online, many populations are being left out. The FCC's opposition to Comcast is just another step towards broader net neutrality.
I agree that Comcast could potentially capitalize on the online market. They could either buy/merge with other video websites, or potentially upgrade their own website in order to appeal to consumers more effectively than other websites.