Comcast's Ad Sales Investigated by Justice Department

Brian Roberts Comcast CEO - H 2014
AP Photo/Susan Walsh

This past March, a few weeks before Comcast dropped its bid to acquire Time Warner Cable, the cable media giant told regulators that "spot cable advertising accounts for only about seven percent of the $72 billion annual spending on local advertising, a share that is irrelevant under any antitrust standard."

Perhaps not irrelevant.

The U.S. Department of Justice is looking into whether Comcast's practices in the spot market — time reserved by cable companies for geographic-specific advertising — constitute a violation of antitrust law.

Comcast has received a civil investigative demand as Justice Department lawyers analyze whether the company is attempting monopolization.

During the Comcast-TWC regulatory review, rival pay TV providers like CenturyLink came forward to complain how Comcast's ad-sales representation firm Spotlight was dominating the independents. Regulators were also told that Comcast was conditioning a multichannel video programming distributor's (MVPD) participation in its "interconnects" — local cooperatives serving the pay TV providers — on an agreement to use Spotlight.

In light of the Justice Department's inquiry, Comcast is defending its arrangements with other cable companies as increasing efficiency and keeping costs down for advertisers.

"To better compete with local advertising platforms with significant scale, like a broadcaster or web app that can sell an entire geographic market, and to provide more and better choices to advertisers, MVPDs have long worked together through local interconnect arrangements to sell local advertising," Comcast said in a statement to THR.

"We believe these long-standing industry practices are good for advertisers and consumers, and we and other MVPDs are continuing to provide these important services to our clients," added Comcast. "We plan to cooperate fully with the Department of Justice's inquiry."

At the FCC, CenturyLink noted there were certainly "pro-competitive" arguments for using regional interconnects, even ones set up and administered by Comcast, but those justifications didn't excuse the exclusion of rival pay TV providers wishing to use independent ad sales representatives.

The Wall Street Journal first reported news of the DOJ's antitrust inquiry.