Comcast Merger

This hasn't been getting quite as much media coverage as it deserves, but it's a big deal: the Feds have signed off on Comcast acquiring a majority interest in NBC Universal. It's a big deal because it highlights the emerging commercial logic of new media. If people are willing to pay for "pipeline" but not for "content" -- that is, if they'll pay for internet access, but not for TV shows, movies, and music -- then the logical choice is for the "pipeline" companies like Comcast to take over the content companies and start creating their own content. In economic terms a merger like this is a form of vertical integration: it combines different levels of the value chain -- in this case production (NBC) and distribution (Comcast). In the bad old days of media monopoly in the movie industry, measures were taken to prevent movie studios from owning movie theaters -- another form of vertical integration -- because of the power that it gave studios to block rivals from gaining access to outlets for their movies. If 20th Century Fox owned the majority of movie theaters in the country, they could control which movies the public gets to see. The laws were intended to increase competition and thereby to increase the diversity of content available to the public -- one of the goals of legal regulation in a democratic society. In a world in which Comcast has its own TV company it has a similar incentive to block access to rivals (perhaps slowing their signals) and to direct as much traffic as possible to its content. Thus, issues of net neutrality are at stake in the merger: that is, will commercial providers continue to allow equal access to the internet, or will they start to block or slow access to some parts of the net and favor access to others. Maybe we won't have one internet anymore, but different internets that access different sites, depending on what internet provider we use. At stake, in other words, is the open character of the internet and the future of the broad array of information that it has made available to those with internet access.