FEE WARS: Is Comcast buying a non-aggression pact with NBC?

The Feds and Congressional leaders are promising strict scrutiny of Comcast’s proposed purchase of NBC Universal, and rightly so.  Recently, broadcast networks like Fox and ABC have been firing shots across the bows of Time Warner and Cablevision, respectively, threatening to blackout major events like the Super Bowl and the Oscars, unless the cable giants pony up on fees.  So it is indeed curious to see Comcast buying NBC just as its broadcast bretheren are launching a major fee offensive.  In fact, ABC’s recent blackout showdown with Cablevision has cable companies lobbying the FCC to prohibit networks from pulling signals during negotiations.

The opening salvo of the fee wars has shown cable companies the kind of the intimidation broadcasters are willing to wield against them to force fee concessions.  Could it be that Comcast has read the writing on the wall, and seeks to buy a non-aggression pact with NBC?  Only time, and plenty of government oversight, will tell.

In buying NBC, Comcast is also buying the right to charge more for NBC shows, and even leverage them in certain markets, which would necessarily hike cable rates nationwide and ruffle Comcast’s competitors, broadcasters, and customers alike.

The fee wars are poised for an escalation, and broadcasters may be down to two choices for survival.  On one hand, they can hedge their losses by fighting, as Fox and ABC have, for cable fees.  And on the other, they can be purchased by a cable provider and live on as vassals in the broadcast realm.  So, whither PBS?  It’s the one broadcaster that can’t be sold, merged, or leveraged (although Comcast already owns PBS Kids), which leaves PBS with no other choice but to assert its market standing and either negotiate for retransmission fees (like ABC), or promote its future as a subscription channel (like FOX).  There is, of course, a third choice:  to be put out to pasture.


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