Bloomberg, Comcast in ‘neighborhood’ brawl

June 15, 2011, 3:11 PM UTC
Bloomberg L.P., London
Bloomberg TV

FORTUNE — One of the main worries surrounding Comcast’s (CMCSA) merger with NBC Universal was that Comcast would use its cable platform to favor its own programming at the expense of competitors. From the beginning, the financial news organization Bloomberg has issued perhaps the loudest complaints about the situation. Now it’s asking the Federal Communications Commission to step in.

Over the past few years Bloomberg has spruced up its business-news channel, Bloomberg Television (BTV), to compete with the better known CNBC. Bloomberg says it has tried to get Comcast to adhere to the FCC’s order that allowed the merger with a long list of restrictions. One of those restrictions is that if Comcast has or creates “neighborhoods” – similar kinds of programming grouped near each other – of news channels, it must include “independent” channels. For example, if Comcast has CNN, Fox News, MSNBC and CNBC near each other on the channel grid, it also must include BTV in that group.

Usually, though, BTV, when it’s on a Comcast system at all, is somewhere up around Nick Jr. or The Hallmark Channel. Hence, many viewers miss it. Bloomberg’s entreaties to Comcast have been fruitless, and on Monday the company filed a formal complaint to the FCC demanding that Comcast move BTV closer to CNBC, CNN and the rest on systems that – here’s a new verb for you – “neighborhood” channels.

Comcast makes two main arguments: that it doesn’t neighborhood now and that the FCC order applies only to future neighborhooding.

A skip through Comcast’s program listings in various cities reveals that either it does in fact neighborhood its news channels, or by pure blind luck, news channels just happen to be grouped together in such markets as Los Angeles, San Francisco, Chicago, Washington, D.C., Atlanta and many others. In many markets, CNBC, MSNBC, CNN, HLN and Fox News are all near each other, often somewhere in the 40s or 50s, while BTV is up in the 100s or even 200s.

But are four or five news channels all grouped together a “neighborhood?” It seems like they should be – just by virtue of the fact that the channels are so often bunched together, obviously on purpose, both by Comcast and by other cable providers. Comcast, though, says in a letter responding to Bloomberg’s complaint that such a grouping would need to include somewhere between 10 and 15 similar channels to be called a neighborhood. Bloomberg says a neighborhood exists whenever there are at least four news channels within five places of each other. The FCC, which didn’t define “neighborhood” in its order, will have to decide.

Like BTV, the Fox Business Network, which is less well known for its business reporting than for its increasingly bizarre form of reality programming (but never mind that for now), is also often relegated to the upper reaches of the grid, sometimes near BTV, sometimes not.

In a perfect world, Comcast would obviously prefer that it had no competition for CNBC, which sometimes presents business and economic news as if it were covering sporting events (Bloomberg is generally more serious, and hence more useful to people actually interested in business news. But never mind that for now). That’s why people are worried about the merger: having the same company owning both content and the platform for distributing it (whether television or the Internet) presents a whole host of potential problems and conflicts. Which is why the FCC had to issue an order filled with restrictions on what Comcast could and couldn’t do.

Comcast’s argument that the order applies only to future neighborhooding of channels also seems wrong. The order states that if Comcast “now or in the future” carries news or business news channels in neighborhoods, independent channels must be included. In its letter responding to Bloomberg’s FCC complaint, Comcast basically says the “now” part means any time after the merger was complete, and doesn’t apply to channel lineups that existed before the merger. Forcing Comcast to rejigger its channel lineups would cause “substantial confusion” for customers, the company argues.

To be fair, although the definition of “now” seems pretty clear, the language in the FCC order is a little flimsy and open to wide interpretation, not only on this point but also on others. Expect situations like this to continue as competitors of Comcast’s TV and Internet programming continue to look for reasons to complain whenever Comcast seems to be using its platform muscle to push its own content.

In approving the merger, the FCC might have created a lot more work for itself than it bargained for.