DirecTV fears deal could give Comcast "online loophole"

DirecTV, the nation's second-largest pay-TV company, has warned the government that Comcast Corp. could use its merger with NBC Universal Co. to create an "online loophole" and stream exclusive NBC content to Internet subscribers.

By streaming exclusive sports or entertainment to its Internet customers, Comcast could gain a competitive advantage over pay-TV rivals, DirecTV said in comments filed late Monday evening with the Federal Communications Commission.

An online loophole could replicate Comcast's use of the "terrestrial loophole" in Philadelphia, which has allowed the cable giant to withhold Phillies, Flyers and Sixers games from the nation's two satellite-television providers, DirecTV said. The two satellite companies are DirecTV and Dish, and they have a smaller share of the pay-TV market here than in other cities.

"Our concern is Comcast using the NBC programming that it would own to be anti-competitive in the pay-TV market," Stacy Fuller, DirecTV's vice president of regulatory affairs, said Tuesday.

NBC programming should be available to all pay-TV operators on the same terms, no matter what form the content is delivered to consumers, she said.

David L. Cohen, executive vice president at Comcast, said Tuesday that DirecTV's concerns were likely addressed with Comcast's recent agreement with independent NBC TV stations. "We have agreed we will not migrate sports and premier entertainment from the broadcast-TV network," he said. If those shows appeared on NBC stations, they would also be available to satellite-TV customers, he said.

The deadline for filing comments over Comcast's proposed deal to acquire NBC Univeral Inc. was midnight on Monday to the FCC.

Other groups filing concerns or opposition to the merger were the Communications Workers of America, Bloomberg L.P., the California public-interest group Greenlining Institute, and an association of smaller cable operators, the American Cable Association.

The filing of comments officially puts the review of the $30 billion deal with regulators, who are evaluating Comcast/NBCU for antitrust concerns and potential public benefits.

Hal Singer, an economist with Navigent Economics who is consulting for the CWA in its opposition, said he was concerned with Comcast's added market power in an NBCU deal. Said Singer: "There is no good scenario."