Comcast to share content with Netflix, competitors
Comcast: To take over NBC, Comcast agreed to license popular NBC shows and movies to competitors like Netflix and Apple. the only question is, can they afford it?
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But figuring out how to protect online video was tricky because the market is still taking shape.Skip to next paragraph
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Netflix offers subscription plans with unlimited online viewing for $8 a month. Apple and Amazon.com let customers rent or buy individual movies and TV shows for as little as a few dollars apiece — providing an alternative for people who don't want big bundles of cable channels they may never watch. Apple and Google make set-top boxes and software that transfer online video to television sets, freeing it from computer screens. TV makers are also building in Internet capabilities.
All these options could make it easier to cut the cable cord — and the cable bill. In 2010, Comcast's cable customers paid an average of $70 per month for video services.
But with control of NBC Universal, Comcast could handicap Web rivals by overcharging for — or simply withholding — all sorts of marquee content. A "Top Chef" fan, for instance, might not drop cable if the show weren't available online. Comcast could also block or slow online video traffic on its massive broadband network. ITunes can't compete with cable if programs stutter online.
None of the big online video companies would comment about Comcast. And Comcast itself insists it does not see online video as a threat — but rather a way to expand its own reach.
Still, in approving the deal, federal officials attached dozens of conditions, including several big ones to protect Internet video:
— Comcast must sell its content to online video services. That gives them access to marquee NBC Universal programming.
— Comcast can't interfere with Internet video traffic flowing over its broadband network. That means that it cannot prevent its subscribers from accessing Netflix and other Web video services, or slow down traffic from these services to make them jerky, unreliable and hard to watch.
— Comcast must sell stand-alone Internet access at a reasonable price, without tying it to a cable TV package, to enable cord-cutting. That includes offering a standard 6-megabit-per-second plan, which is fast enough to handle Internet video, for roughly $50 a month.
Although these requirements offer no guarantees of success for new online video services, they aim to ensure that Comcast cannot impede the online businesses. They also break new ground by giving Internet rivals some of the same protections that have long been available to satellite companies and other subscription TV competitors.
Existing FCC rules require cable TV companies to license the channels they own to such rivals. Now, new Internet video services can license big packages of NBC Universal programming for the same price that a traditional rival pays. Or they can buy specific shows or channels if they are already licensing comparable programming from another major media company. For example, if Netflix strikes a deal to license children's programming from The Walt Disney Co., Comcast must make comparable children's programming from NBC available to Netflix under similar terms.