RCN CEO Says Competing With Comcast/NBCU Raises Fears of New AT&T

Citing Comcast/NBCUniversal using NBC content as a competitive cudgel to whack broadband competition, RCN CEO Jim Holanda testified in U.S. v. AT&T and Time Warner that he fears New AT&T doing likewise. Turner content is "significantly viewed" by RCN subscribers, with three of its networks among the 10 most watched, judging by set-top box data, he said. A DOJ attorney asked Holanda about an RCN offering that pairs broadband with a video tier of only TV stations and public access, and how his company can't offer that to its entire subscriber base because Comcast contracts prohibit it in some areas without selling the entire cable giant's bundle of content due to penetration requirements. He said those limits came up after Comcast bought NBCU, and the operator has since come into some RCN markets with a roughly analogous offering. He worries New AT&T would similarly use Turner programming as competitive leverage against RCN when competing for double- and triple-play customers in markets where it overlaps with AT&T. RCN programming costs have been going up five to eight times the rate of inflation over the past five years, Holanda said. He said major MVPDs have a 25 to 40 percent price advantage for programming due to their size, which puts RCN at a $10 to $15 a month cost disadvantage. Also Tuesday, DOJ's lawyer and an AT&T/TW expert witness -- UCLA economics professor Peter Rossi -- locked horns repeatedly as Justice challenged Rossi's criticisms of research that played a big role in the government's model (see 1804160030). DirecTV filed a docket 17-2511 motion (in Pacer) Tuesday in U.S. District Court for the District of Columbia asking that it be dismissed from the DOJ suit, as expected (see 1803190023). It said government failed to state a claim against it, since it's not a party to the challenged deal.