Comcast accuses Discovery of 'extortionate demands' in merger filing

Credit: Reuters/Tom Mihalek

A view of the headquarters of Comcast on JFK Boulevard in Philadelphia, Pennsylvania May 21, 2014.

'Such extortionate demands are patently improper,' Comcast said in a summary of the filing. 'As the self-proclaimed '#1 Pay-TV Programmer in the World,' Discovery does not need additional regulatory help to succeed in the marketplace.'

Discovery said it stands by concerns it expressed in a meeting with the Federal Communications Commission (FCC) earlier this month that the merger could give Comcast more leverage to impose onerous terms in deals with programmers. The company owns the Discovery, Oprah Winfrey Network, TLC and Animal Planet cable channels.

'Comcast's silence on the details of key issues like program discounts, and instead, its continued strategy of intimidating voices that are not fully supportive of its position, is troubling,' Discovery said in a statement.

Several weeks ago, Discovery told the FCC it was concerned the merger 'could result in lower quality, less diverse programming and fewer independent voices among programmers.'

The FCC is reviewing whether the proposed $45 billion merger between Comcast and Time Warner Cable, the two largest U.S. providers, is in the public interest.

Responding to objections to the transaction in a filing that was made public on Wednesday, Comcast said its bid for Time Warner Cable will not harm the public interest despite called 'unfounded' and 'self-interested' objections by content providers, Internet service providers and other groups.

Comcast also named Cogent Communications Group Inc and advertising group Viamedia as companies seeking business advantages by objecting to the merger.

Though analysts have predicted the FCC will ultimately approve the merger, regulators are expected to impose conditions. Particular attention is on Internet traffic issues as the FCC works on new 'net neutrality' rules that guide how Internet providers route web content on their networks. The agency could use merger conditions in lieu of rules that are facing a heated debate.

In August the FCC sought detailed tables on Comcast's interconnections with other services carrying web traffic as well as network congestion.

While opponents of the merger say it will result in fewer choices for consumers, Comcast said it will fuel competition by putting a 'heightened sense of urgency' on competitors to improve the quality of their service, AT&T Chief Executive Officer Randall Stephenson said, according to a summary of the filing.

Comcast said many object to the merger because the company refused to grant the commenters' requests for free backbone connections and participation in Comcast's advertising technology, for example.

(Reporting by Marina Lopes)