Assignment:
Mergers That Abuse Customers?
In 2011, the federal government approved, with restrictions, a merger giving Comcast, the cable TV giant, a controlling interest in the NBC television network. Among other concerns, critics feared the merger would allow Comcast to arbitrarily favor NBC channels over those of competitors. Then in 2013, Comcast announced it was buying the remaining 49 percent of NBCUniversal. From the inception of the merger discussions, one of the parties most concerned was the Santa Monica, California-based Tennis Channel, which feared Comcast would favor its own sports channels (Golf Channel and NBC Sports Network) over the Tennis Channel and other independents.
The Tennis Channel filed a complaint with the Federal Communications Commission alleging that Comcast is violating the law and the terms of the merger agreement by favorable placement for the Golf Channel and NBC Sports Network while leaving the Tennis Channel on a littlewatched sports tier. Comcast says the channel placements reflect market realities and a long-term contract signed when the Tennis Channel was a start-up. In 2012, the FCC ruled for the Tennis Channel finding that Comcast was violating federal antidiscrimination carriage rules. At this writing, the case is on appeal at the U.S. Court of Appeals for the D.C. Circuit (Case No. 12-1337) where the primary questions appear to be the statute of limitations for such complaints and whether restrictions on Comcast's treatment of the Tennis Channel would violate Comcast's freedom of speech.
Questions
1. Do you think Comcast has a responsibility to treat the independent Tennis Channel the same as its own affiliate sports networks, including the Golf Channel and NBC Sports Network? Explain.
2. If you were running a business would you treat all of your customers the same, regardless of their contributions to your bottom line? Explain.
3. In your view, should the government require Comcast to treat the Tennis Channel as well as it treats its own sports channels? Explain.