Comcast offers more arguments for its NBCU deal

Comcast Corp. sought to bolster the case in Washington for its proposed $30 billion deal for NBC Universal Inc. with two new economic reports.

The reports were paid for by Comcast and submitted Wednesday to the Federal Communications Commission, which had requested them. Comcast spokeswoman Sena Fitzmaurice declined to say how much the cable giant paid.

In one report, Comcast told government regulators that Internet video was a complementary service to traditional cable TV, so the proposed Comcast-NBCU deal would not limit competition.

Mark Israel, senior vice president of consulting firm Compass Lexecon L.L.C., and Michael L. Katz, a former chief economist at the FCC, produced the report.

Critics say Comcast would like more control over online content through its acquisition of NBCU, which has a stake in one of the most popular online video sites, Hulu, and supplies entertainment programming for TV, cable, and the Internet.

In the second report, Comcast said that the NBCU deal could benefit consumers by making it easier to develop new TV and Internet services. In effect, Comcast could more easily negotiate deals with NBCU if it owned NBCU, the report said.

Gregory L. Rosston, the deputy director of the Stanford Institute for Economic Policy Research, was the author.

Fitzmaurice said the cable company would like to "lead by example" through its control of NBCU. "There has been a reticence in the industry to try new business models," she said.

The Rosston report talked of the difficulty Comcast had reaching content deals for its cable TV video-on-demand service. Controlling a provider of entertainment content would make it easier to develop new services like that, the report said.

The Justice Department and the FCC are scrutinizing the proposed Comcast-NBCU deal, which was announced in December. The Justice Department is considering antitrust issues, while the FCC is seeking to determine whether potential public benefits outweigh potential harm from the deal.

Comcast does not expect answers to the regulatory review until late this year.

Andrew Jay Schwartzman, senior vice president and policy director of Media Access Project, a nonprofit advocacy group opposed to the merger, was quick to blast the reports.

"Competition seems to flourish in Comcastland, even though cable and Internet access rates continue to increase far in excess of inflation," he said in a statement. "Its new analysis of online video is especially problematic in this regard. Comcast argues that the NBC network is not 'must have' programming, and asks us to believe that it would never withhold NBC or its cable networks from Internet competitors. This is not convincing."