Net neutrality objections fade, Congress appears likely to pass NBCU + Comcast

Rep. Ed Markey (D - Massachusetts)In the end, it was one lone congressman who raised the subject of net neutrality, with respect to access to content over the Internet, as more than a passing reference, or by way of suggesting that certain topics be ignored altogether: Rep. Ed Markey (D - Mass., who also chairs the Energy and Environment Subcommittee), author of the Internet Freedom Preservation Act still being deliberated in Congress, voiced his skepticism over the viability of the proposed acquisition of NBC Universal by a new unit of Comcast, saying he didn't see any guarantees that the current class of over-the-air programming offered by NBC would not be transferred to Comcast pay-TV services such as TV Everywhere.

But with NBC being the butt end of jokes on TV everywhere, and elsewhere, with respect to its dismal standing in audience ratings and its poor handling of the recent "Tonight Show" reprogramming kerfuffle, the objections raised by Rep. Markey might not have mattered much. In some folks' mind, why would anyone want to pay for NBC shows anyway?

"Clearly the concern here is that when a company that has the wire going into the home merges with a company that has all of NBC Universal's content, there could be a temptation to discriminate against others," stated Rep. Markey, during his Q&A period to a House Telecommunications and the Internet Subcommittee hearing Thursday morning. The subject of the hearing this morning was the Comcast + NBCU deal, among the witnesses were Comcast CEO Brian Roberts, and NBCU CEO Jeff Zucker -- the executive who signed the dotted line on the Jay Leno / Conan O'Brien time change, and subsequently unsigned it.

For his metaphor, Markey chose to imagine the fate of an everyday sci-fi fan who wants to launch some kind of service or blog based on Avatar, but finds himself hampered because the title is owned by 20th Century-Fox. "Going out in the future, we are concerned about the proverbial kid-in-the-garage that's got that great idea. We've got a concern about the kid who thinks up the idea of ' TV.' It could be a big concept, right? And it's not owned by Comcast or NBC. So we have to make sure that it doesn't get discriminated against because it's not an NBC idea, it's not a Comcast idea. So how can we enshrine these principles of non-discrimination against those great new ideas, from having access to the pipes that go into people's homes, that are controlled by Comcast?"

It was perhaps the weakest argument made to date in favor of net neutrality principles in any public hearing to date. But it was the strongest argument in that category today.

Comcast's Brian Roberts appeared perfectly prepared to face much stronger opposition, oftentimes pleading innocence or even no knowledge of the situation where the US #12 cable provider, WOW (formerly WideOpenWest), was denied access to Comcast's existing cable channels (which include E!, the Style Channel, gaming network G4, and sports channel Versus). WOW CEO Colleen Abdoulah was one of only two witnesses who found themselves mounting their own assertive defense, amid the lack of probing from House members. Although Abdoulah admitted not being against the concept of an acquisition or merger on its face, she warned Committee members that a deal could encourage the combined entity to withhold more programming from competitors, including from NBC-owned cable channels CNBC, MSNBC, and Bravo.

And so it was that the net neutrality issue in Congress successfully metamorphosed into a debate over TV viewers' right to see Keith Olbermann, Maria Bartiromo, and Tom Colicchio.

"I would first want to point out that, whatever you do, if you're really trying to make that protection or achieve that goal, it's going to have to apply across the board," responded Comcast's Roberts to Rep. Markey, "whether that's to all providers, what levels of the Internet, what about wireless? The world is changing and converging and evolving very, very quickly. So again, I believe that this particular transaction doesn't really have the potential, in my opinion, to change that kid in the garage or that ',' or whatever example one wants to pick. Let's just say, Google today is over 50% of all the video views, of the 30 billion views that took place last month."

By comparison, Roberts pointed out earlier, Hulu (co-owned by NBC) had 4% of video views for the same period, NBC itself commanded 1%, and Comcast was responsible for less than one-half of one percent. Although Comcast, by one estimate heard today, is responsible for providing more than 51% of cable service to Americans, its argument is that the combined Internet interests of NBC Universal and Comcast would fail to squeak by 5% of the world's video views, even with the TV Everywhere program going at full steam. Roberts used those figures to illustrate how the proposed combination would constitute the type of horizontal integration that legislators and regulators encourage, as opposed to the type of vertical assimilation of businesses that provide much the same services as each other -- assimilation that typically generates antitrust concerns.

Flanked by his father, Comcast founder Ralph J. Roberts (whom at least two representatives today broke protocol to identify as their personal friend), Brian Roberts promised Rep. Markey that it is not, and will not be, in Comcast's business interests to deny programming to an available carrier. That left Rep. Markey to do little more than praise Roberts, literally for creating a business model that the rest of the world could live by: "Broadband, to a very large extent, is a proxy...for 21st century American competitiveness for the 3% of the population of the world that we represent, and we have to make sure all of that creativity gets unleashed, because that's something we have to brand globally. So that's the conversation that I think we have to have going forward; and this agreement that you have really should be a model to ensure that that becomes who we think of ourselves [to be] as a nation."

Next: But what about Boxee?...

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