Comcast Not Factor When NBCU Negotiates Affiliation Agreements, Executive Says

NBCUniversal, when doing affiliation agreements with MVPDs and virtual MVPDs, doesn't think about how such deals might affect Comcast's MVPD business and never has been asked by corporate to make that part of its negotiating strategy, NBCU Content Distribution Chairman Matt Bond testified Tuesday in U.S. v. AT&T and Time Warner. NBCU never withheld content from an MVPD so as to drive subscribers from that distributor to Comcast, and Comcast corporate never asked it to do so, Bond said. "We're interested in getting the most ... distribution we can get."

Bond called virtual MVPDs "an important new pathway" for distribution since they're growing subscribers while traditional MVPD subscriptions are declining, and he said the virtuals will become more important as they grow. Bond acknowledged major deals with MVPDs require a variety of approvals, including from Comcast top management. DOJ argued New AT&T would have motive and opportunity to withhold TW content from DirecTV competitors (see 1803220033).

Under questioning by AT&T/TW outside counsel Kevin Orsini of Cravath, Swaine, Bond said the arbitration terms required by the Comcast/NBCU regulatory approvals primarily come up in talks with MVPDs as those distributors try to get leverage, and arbitration has been invoked twice. The sides have been at odds over the supposed efficacy of Turner's arbitration offer to MVPDs in alleviating competitive concerns about New AT&T.

A DOJ witness, Bond verified an array of internal emails about the status of NBCU talks with various distributors, and NBCU distribution strategy.

As long as consumers have options for selecting content instead being tied to fat bundles or to having to use a specific internet provider to access specific content, a vertical merger between content and internet providers doesn't necessarily pose a competitive threat, American Enterprise Institute adjunct scholar Bronwyn Howell blogged Tuesday. If content can be accessed via multiple technologies, it's not in providers' interests to limit access to one technology or provider when potential consumers might get their internet access from other sources, Howell said, saying raising internet prices to make a broadband-plus-content package more attractive could also cost potential subscribers who aren't interested in that content.

Both sides also cited a deposition of a retired Cable One negotiator, with Justice highlighting how the MVPD wasn't mollified by its option to go for arbitration when talking to NBCU and how it never seriously contemplated a long-term loss of Turner content. AT&T/TW counsel in reading into the record the deposition highlighted how the negotiator during the deposition indicated a previous 30-day Turner blackout on Cable One hadn't caused notable subscriber losses, though that blackout was in the fall, when no MLB teams in Cable One markets were in the playoffs. AT&T/TW counsel also noted the cable operator didn't see HBO as a necessary promotional tool.

DirecTV Chief Content Officer Dan York was asked about the company not carrying regional sports network SportsNet LA and denied DOJ assertions DirecTV had aligned with other MVPDs when negotiating with it. AT&T and the department last year reached a settlement on a Justice complaint DirecTV had been a ringleader of an information-swapping group of MVPDs (see 1703240005).

In the courtroom for much of the afternoon was DOJ Antitrust Division Chief Makan Delrahim. Principal Deputy Assistant Attorney General Andrew Finch, who ran the division while Delrahim was awaiting confirmation, has been a constant presence during the trial.