Cable Operators

Comcast Says NBCU Is Negotiating 'Full Freight' Internet TV Deals

Media Company In Talks With Several Online Video Distributors, According to MSO’s Report to FCC 3/01/2013 11:25 AM Eastern

NBCUniversal is in talks with several Internet video providers to license a full lineup of programming comparable to what it offers traditional pay TV providers, Comcast disclosed in its annual report to the Federal Communications Commission.

In the past year, “NBCUniversal received and is negotiating several 'full freight' requests,” Comcast said in its second annual compliance report filed Thursday with the commission. The report is required under the FCC's 2011 approval of Comcast/NBCU transaction.

Comcast declined to provide additional details on the negotiations.

Intel, for one, has publicly discussed plans to launch an over-the-top pay TV service in 2013 and says it has approached major programming providers. Others rumored to be developing a “virtual MSO” service include Sony.

The terms of the FCC’s January 2011 approval of the Comcast deal for NBCU include a provision requiring the companies to offer video programming to “legitimate OVDs on the same terms and conditions that would be available to an MVPD [multichannel video programming distributor].”

Overall, Comcast claimed in the report it has over-delivered on its commitments. Last month Comcast said it would buy out GE’s stake in NBCU for $16.7 billion, more than a year earlier than expected.

In its first compliance report on the NBCU deal, released in February 2012, Comcast said a “minority” of online video distributors had sought a “‘full freight’ or ‘MVPD Price’ offer.”

Aside from those seeking such “full freight” deals, Comcast noted that content-licensing agreements with OVDs have become a regular part of NBCU’s business. In the past year, NBCUniversal entered into new agreements with Internet video distributors, including Amazon.com, Barnes & Noble, Flixster, Google, MediaNavi, Target, Toys ‘R’ Us and Vd.io.

NBCU also renewed existing agreements with Apple, Blockbuster, Hulu, InDemand, Microsoft, Samsung, Sony and Vudu, among others, in addition to striking deals with several MVPDs that include access to linear channels across multiple platforms.

On Dec. 4, 2012, the FCC’s Media Bureau clarified that online video distributors seeking to obtain NBCU programming that invoke the “benchmark condition” -- which requires they have a licensing deal with at least one nonaffiliated content company -- must disclose the terms of the comparable peer agreements to NBCU “to enable NBCUniversal to carry out its obligations under the condition.”

In January, CBS, News Corp., Sony Pictures Entertainment, Time Warner Inc., Viacom and The Walt Disney Co. filed an application requesting that the order be reviewed, arguing that it requires disclosure of their “most sensitive and highly confidential information as requested by [Comcast/NBCU] within the process of negotiations to which the Content Companies are not even parties.” Comcast and NBCUniversal opposed the application for review.

The one OVD arbitration against NBCU so far was brought by startup Project Concord, which sought content under the “benchmark condition.”

The FCC’s Media Bureau ruled that NBCU cannot exclude films less than a year old from OVD licensing agreements, unless the programmer can demonstrate it would cause a breach of contract between NBCU and a third party.

Both parties filed applications for review of the order on Dec. 13, 2012, which remain pending. In the meantime, NBCU has provided “significant content” to Project Concord under the parties’ arbitrated and now-in-force programming agreement.

John Eggerton contributed to this article.

September