Tomorrow, following our filing with the FCC last week of our Public Interest Statement comprehensively setting forth the public interest case for our planned joint venture with GE regarding NBC Universal, we will continue to make our case in Congress. Comcast Chairman & CEO Brian L. Roberts and NBC Universal President and CEO Jeff Zucker are headed to Washington, DC to appear before two subcommittees on the same day.
In the morning Brian and Jeff will testify before the Subcommittee on Communications, Technology & the Internet chaired by Rep. Rick Boucher, with Ranking Member Cliff Stearns and in the afternoon, they’ll appear before the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights chaired by Sen. Herb Kohl, with Ranking Senator Orrin Hatch. The hearings will be streamed live on the committee’s websites, and C-SPAN 3 will cover the morning hearing live and will archive the footage as well.
Brian and Jeff will be joined at the hearings by witnesses from Consumer Federation of America, the Media Access Project, the NBC affiliates board, WOW (a competing cable company in the Midwest), and the Progress and Freedom Foundation.
We plan to tell the committees why this joint venture makes sense for American consumers and especially for Comcast and NBC Universal customers. The NBC broadcast network reaches almost every American home with a TV - it’s an American icon. For much of the history of TV, NBC was one of only three networks available to viewers. It’s amazing how much broadcasting and cable television have changed since then. From just three broadcast networks, we’ve moved to a world of hundreds of cable networks, not to mention the thousands and thousands of movies and TV choices available On Demand for digital cable customers. We are excited about this joint venture because it will help accelerate the transition to the future of "anytime, anywhere" TV content.
What we hear from our customers every day is they want more - more video programming on demand on their TVs, more online, more on their mobile devices. They want it all and they want it now. We want to bring it to them.
We’ve got a great track record of delivering on innovations that consumers want - like video on demand (VOD), which our customers have now watched 14 billion times over the past six years (that’s much more than the number of iTunes downloads in the U.S. over the same period of time). When we first started VOD, many doubted consumers would embrace it, and we had to work very hard to convince content providers to give us access to their shows. It wasn’t until we made an investment in MGM that we were able to obtain more movies to ramp up our VOD offerings, and that got consumers really interested. We think the same thing will happen with this joint venture - with all the great content of NBC Universal, we can put more On Demand on TV and online (while still respectful of existing distribution windows and business models) and the more we bring to Comcast customers, the more our competitors will bring to their customers as well.
We’ve been visiting with many Members of Congress in the weeks leading up to the hearings, and one thing many Members have asked about is NBC News. To us, no part of NBC Universal is more important. The Today Show and Nightly News with Huntley and Brinkley were part of the daily lives of so many of us when we were growing up. Many of the people we’ve heard from on the Hill also believe that TV programs like Meet the Press have become American institutions and are critical to our democratic process. Because of our strong belief in the importance of broadcast news, on the day we announced this transaction, we pledged to enhance local news and other forms of local programming and to preserve the journalistic independence of NBC News. Expanding on those commitments in our Public Interest Statement last week, we promised to increase local news production by a total of 1,000 hours at the NBC owned and operated stations. We want to preserve the quality, and improve the quantity, of news and public affairs programming around the country - and we’re prepared to invest to do that.
In the current economic environment, broadcasting, like many businesses, is challenged. Before we announced this deal, there was a lot of speculation that we’d turn NBC and Telemundo into cable-only networks. We’ve pledged not to do that (specifically stating our goal to preserve free, over-the-air broadcast television). We want to preserve the local broadcast affiliate model and work with the affiliates of NBC and Telemundo to secure a viable future for the network and affiliates alike.
Another issue we will discuss at the hearings is competition. A few people have said that this transaction will harm competition. We don’t think that’s true - every market we operate in is fiercely competitive, including the distribution, content, and Internet markets. While Comcast may be the largest video provider, the next two largest providers are DirecTV and EchoStar - each of which has a nationwide footprint (we don’t) and both of which compete against us for nearly every customer we have. And Verizon and AT&T (both much larger than Comcast) are now aggressively overbuilding our cable systems all around the country. Even if competition itself wasn’t enough to protect consumers, there are specific FCC rules that require programming owned by a cable company to be shared with competitors, as well as rules that forbid any cable company from favoring programming it owns over other channels. These rules work, and we will of course abide by them (as we do today).
We’re also expecting that there will be discussion of the impact of this transaction on the nascent video over the Internet market. That market is also highly competitive - with many players and very low barriers to entry - and access to content is plentiful. While NBC Universal (through its 32 percent, minority, non-controlling interest in Hulu) and Comcast (through its entertainment and video site Fancast) both participate in this market, our combined share of the market is miniscule (today, that market is dominated by Google/YouTube and populated by dozens and dozens of other sites). We don’t view Hulu and Fancast as competitive - with each other or with our cable service - rather, they are both complementary services. And in any event, we play such a small role in this market (either as a content provider or as an Internet video competitor) that it just isn’t credible to conclude that we have any capacity to get in the way of the development of video over the Internet.
These are just some of the issues we expect Brian and Jeff will address when they testify, and we expect lawmakers will ask a lot of questions. We look forward to this chance to discuss the pro-consumer, pro-competitive, and strong public interest benefits of our proposed joint venture.