Commentary

Comcast Faces New Questions About Hulu

Comcast, which is still trying to convince regulators to approve its $45 billion merger with Time Warner Cable, is now facing questions about whether it lived up to the conditions of its acquisition of NBC Universal.

When Comcast merged with NBC Universal in 2011, the company promised to refrain from managing the streaming video service Hulu -- a joint venture of NBC, Fox and Disney.

But some observers reportedly are saying that Comcast discouraged Hulu co-owners Disney and Fox from selling the online video company in 2013.

Potential buyers included DirecTV and AT&T, according to The New York Times. Reportedly, Hulu could have sold for as much as $1 billion. According to the Times, Comcast executives convinced Disney and Fox to hold off on a sale by touting its ability to “enhance Hulu's value.”

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The report doesn't specify what, exactly, Comcast executives allegedly told the other Hulu partners.

If Comcast did, in fact, nix the sale of Hulu, despite the company's promise to regulators, that casts doubt on whether the company will honor any conditions of a merger with Time Warner.

For its part, Comcast says the company played no part in Disney and Fox's decisions regarding Hulu.

“The decision not to sell Hulu was made only by the members of Hulu's managing board on which Comcast does not sit and has no role and there was no effort by Comcast to influence that decision,” a company spokeswoman said.

Critics of the merger also said today that Comcast hasn't kept its promises to roll out affordable broadband to low-income individuals. Comcast currently offers a program called Internet Essentials, which enables some low-income households to obtain broadband for $9.95 a month.

Critics say that this program is lacking for several reasons. Among others, it has narrow enrollment qualifications and offers “painfully slow, low-quality service,” according to the Stop Mega Comcast coalition. That organization includes companies like Dish as well as watchdogs like Consumers Union.

The group also points out that Comcast's own numbers show that only 13.4% of the 2.6 million eligible households participate in the program.

Comcast addressed some of those criticisms today in a blog post arguing that the program is growing quickly. “The six-month period from September 2014 through February 2015 was the most successful period in the program’s history, with nearly 90,000 new Internet Essentials enrollments,” writes Executive Vice President David Cohen.

He adds that critics “completely misunderstand the complex factors that drive non-adoption.”

Cohen goes on to describe a “bucket of digital literacy issues” that keep people in low-income communities from adopting broadband, including “a perceived lack of relevance of the Internet, a lack of understanding as to the value or usefulness of the Internet, fear of the Internet, and lack of basic digital literacy skills.”

The Justice Department reportedly was slated to meet today with Comcast. It's not yet known whether regulators intend to go to court to block the merger, or will instead hammer out terms with Comcast.

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