Consumer 10.0: NBCU takeover only one of Comcast's fights

As Comcast Corp. stands on the verge of its greatest coup ever - the proposed takeover of NBC Universal Inc. and its array of high-profile programming - the Philadelphia cable giant often seems to be fighting a multifront war.

It has lost customers to Verizon's FiOS fiber-optic system and perhaps to cord-cutters, too - earlier this year, the entire pay-television industry reported its first quarterly customer loss.

It's fighting back aggressively with a push into Internet video and other new features, lively ad campaigns such as its "Don't Fall for FiOS" commercials, and even old-fashioned door-to-door marketing aimed at winning back former customers and finding new ones.

But its biggest battle is still raging behind the scenes in Washington, where the NBCU deal is being weighed by the Justice Department and the Federal Communications Commission. And a key question in D.C. office suites is one that consumers might well be asking, too: If the deal goes through, how will the cable-giant-turned-content-giant behave?

Comcast already claims nearly a quarter of the nation's pay-television customers. It used its cable franchises and a deft acquisition strategy to become the nation's leading home provider of broadband Internet access. With the merger, it would control NBCU's local stations, its popular cable channels, and a fabled TV network.

Comcast's critics have raised many questions, including the political impact of increased media consolidation. But for many consumers, the biggest question is more about the bottom line - theirs, at the end of each month.

Like me, Comcast customers may enjoy its expansion of their entertainment choices - so far, Comcast has delivered more than 17 billion TV shows and movies via its video-on-demand service. They may welcome Comcast's promise of being able to watch shows "anytime, anywhere," including via Comcast's new online delivery system, Xfinity TV. They may well be on board when chief executive officer Brian L. Roberts tells Congress that the merger will "help to accelerate a truly amazing digital picture for consumers."

What they don't love is Comcast's - or any cable company's - prices. And recent program-access disputes around the country, such as the high-profile fight that kept Cablevision subscribers from seeing two of Fox's World Series telecasts, only fuel their concerns.

Pricing was the issue last week when Comcast's deal drew a new round of skepticism from the American Cable Association, a group that represents smaller cable systems. The ACA submitted a study by Northwestern University economist William P. Rogerson, who estimates that unless regulators impose strict post-merger conditions on Comcast, consumers will pay at least $2.4 billion more over the next nine years because of the company's "unrestrained pricing power."

That translates into an extra $2 a month, or about 3 percent more, on a $70-a-month cable bill.

Comcast dismissed what it called a "flawed economic analysis" by Rogerson, who spent a year in the late 1990s as the FCC's chief economist. Each side questions how the other quantifies potential consumer harm and benefit.

But you don't really need those details to weigh Rogerson's underlying argument - that the expanded Comcast will have new leverage in its dealings both with other cable companies and with its own customers.

And if you have any doubts that Comcast will use its leverage to boost market share and profits - as any business would - look no further than Philadelphia.

Since the late 1990s, when Comcast took over the channel now known as Comcast SportsNet, Comcast has refused to share its telecasts of the Phillies, Flyers, and Sixers with its satellite-TV competitors.

Until this year, it relied on a provision in the 1992 Cable Act known as "terrestrial loophole." To keep cable companies from gaining unfair competitive advantage by hoarding channels they own, that law required them to offer competitors any programming distributed by satellite. But to encourage development of new local content, it exempted programming delivered via land-based connections.

The loophole was probably valuable in encouraging the launch of local channels such as Comcast's CN8. But critics rightly challenged its use to keep control of irreplaceable local sports - "must have" programming for many a fan.

For years, the FCC has been chipping away at the loophole, which at the end affected only a handful of cities. This June, it closed the loophole for everyone.

But as the Phillies made their fourth straight playoff run this fall, you still couldn't catch most of their games on DirecTV or Dish Network. And as the Flyers and Sixers begin their seasons, you can't find them there, either.

I asked both Comcast and DirecTV last week for an update.

"We are talking," was all I could get from Robert Mercer, a DirecTV spokesman.

Comcast's Sena Fitzmaurice declined to confirm even that. "We're not going to comment on whether there are current negotiations," she told me.

Fitzmaurice repeated the argument that Comcast officials have offered for years - that DirecTV won't share the NFL Sunday Ticket, a popular and lucrative package of out-of-market games it sells under an exclusive deal with the NFL.

"We've consistently said that if they would give us access to their exclusive content, they can talk to us about access to our content," Fitzmaurice says.

As far as I'm concerned, that's never passed the smell test. DirecTV isn't withholding the Eagles from their hometown fans.

Under FCC rules, the next step would be for the satellite companies to file a program-access complaint, alleging that Comcast is engaging in discriminatory conduct or significantly hindering competition in the market.

Or the FCC could impose terms that would closely monitor Comcast's conduct if it allows the NBCU deal to go through - and finally require Comcast to share Comcast SportsNet with the two satellite companies. That step would effectively double or triple the number of pay-TV choices for Philadelphia's hardest-core sports fans.

If Comcast has proved anything over the years, it's that it knows how to play hardball.

It's time for the FCC to get a little more game.