One might think that satellite provider Dish Network (s DISH) would find the deal to combine Comcast (s CMCSA) and NBC’s (s GE) video assets a big threat to its pay TV service. But instead, in a petition to deny the deal filed with the FCC, Dish — and sister corporation EchoStar (s SATS) — points to the online video market as the main reason that the commission shouldn’t approve the agreement.
“This transaction poses grave threats to the continued expansion and vibrancy of what is arguably the most important development in video markets today — online video — as well as to the competitiveness of the multi-channel video distribution market,” the filing said.
Dish pointed to its efforts to expand its online video offerings, including Dish On Demand, Sling, Google TV and DishOnline, each of which the satellite provider says is crucial to its competitiveness, and each of which is threatened by the Comcast-NBC transaction. According to Dish, “[t]he merged Comcast-NBCU would have a greater incentive and ability to discriminate against competitors in the online video and multichannel video program distribution (MVPD) markets than does either company pre-merger,” Dish writes in the filing.
By combining Comcast’s TV Everywhere service, Fancast Xfinity TV, with NBC Universal’s digital properties — including its stake in online video site Hulu — Dish believes that the combined entity would have leverage to stall some of the innovation in the online video space. In fact, Dish sees many ways in which Comcast and NBCU could disrupt the online video market:
“A combined Comcast-NBCU would have the incentive and ability to take anticompetitive action against Dish Network’s online video products by giving Comcast unique visibility into Hulu; combining Comcast’s broadband gatekeeper position and NBCU’s key role in video-on-demand; blending Comcast’s broadband traffic management power and NBCU’s online video content; joining Comcast’s and NBCU’s ability to interfere with EchoStar’s “Sling” place-shifting technology; and leveraging the combined companies’ ability to offer a multi-platform advertising product.”
Comcast could make Hulu or other NBC content properties available only as part of a TV Everywhere service, for instance, or withhold or downgrade the quality of some content from its competitors. Another possibility, according to Dish, is that Comcast could manage broadband traffic from competitors to make their streaming services less attractive. Since Dish doesn’t operate its own broadband network, it’s at the mercy of companies like Comcast with terrestrial cable plants to provide broadband access over which it can serve its online services. Or Comcast could impose a usage cap on broadband subscribers that could disincentivize them from using competing broadband video services.
While Comcast and NBCU have sought to downplay the importance of online video through their filings with the FCC, Dish says those services are crucial to the competitiveness of satellite video services. In many ways, a combined Comcast and NBCU could have numerous anticompetitive repercussions for Dish and others.
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