The U.S. government approved the proposed combination of Comcast and NBC Universal on Tuesday, smoothing the way for the deal to close by the end of January.þþAs expected, the Federal Communications Commission and the Justice Department both approved the deal with significant conditions attached.þþThe combination of Comcast’s cable systems and NBC Universal’s channels will create a media powerhouse, and it will represent the first time that a cable company will control a major broadcast network.þþ“This is a proud and exciting day for Comcast,” Brian L. Roberts, the Comcast chief executive, said in a statement that thanked the government agencies for their hard work.þþThe approval has been expected for at least the last few weeks. It has been the subject of intense lobbying both by Comcast and by opponents of the deal, who fear that Comcast will restrict access to NBC programming. Comcast says the deal will help achieve its vision of anytime, anywhere access to content.þþAs is normal in media mergers, the F.C.C. imposed a long list of conditions on the deal. They were outlined in an F.C.C. news release on Tuesday. The conditions are intended to ensure that Comcast plays fair when dealing with rival programmers, cable providers and broadband Internet providers. Many of the conditions are intended to remain in place for seven years, an unusually long period of time. þþThe F.C.C. vote was 4 to 1, with the senior Democratic commissioner, Michael J. Copps, casting the dissenting vote. Mr. Copps, who had expressed doubt in the past about whether the combination would benefit consumers, said in a statement Tuesday that it “confers too much power in one company’s hands.”þþMr. Copps also said, “The Comcast-NBCU joint venture opens the door to the cable-ization of the open Internet. The potential for walled gardens, toll booths, content prioritization, access fees to reach end users, and a stake in the heart of independent content production is now very real.”þþSeeming to temper that concern, Julius Genachowski, the F.C.C. chair, said in his own statement that the conditions imposed by the F.C.C. “include carefully considered steps to ensure that competition drives innovation in the emerging online video marketplace.” He continued, “Our approval is also structured to spur broadband adoption among underserved communities; to increase broadband access to schools and libraries; and to increase news coverage, children’s television, and Spanish-language programming.” þþIn coordination with the F.C.C., the Justice Department’s antitrust division said it would not block the deal, but like the F.C.C. it put a number of conditions in place.þþNotably, Comcast is being required to give up NBC Universal’s management stake in Hulu, the premiere online TV Web site. “Without such a remedy, Comcast could, through its seats on Hulu’s board of directors, interfere with the management of Hulu, and, in particular, the development of products that compete with Comcast’s video service,” the Justice Department stated in a news release. þþNBC and the owners of ABC and Fox all have minority stakes in Hulu. Comcast said it would retain an economic stake in Hulu, and would continue to provide TV shows and movies to Hulu the same way that Hulu’s other minority owners do.þþIn the complicated transaction, Comcast is buying a majority stake in NBC Universal from General Electric. Over time, Comcast will have the option to buy a larger share of NBC.þþIn the nearly two years since Comcast began negotiating to buy NBC — the deal was hatched in the spring of 2009 — the media marketplace has shifted considerably as online video viewing has grown in popularity, even as television advertising has rebounded from its recessionary lows.þþOne result of the consumer tilt towards online video has been the rise of Netflix, which has pivoted from its beginnings as a DVD-by-mail business to a streaming video company. The success of Netflix in changing consumer behavior has raised fears that the heart of Comcast’s business — selling cable subscriptions — could be in jeopardy. To that end, the deal to acquire NBC Universal will give Comcast a significant role in the future of online television viewing.þþThe F.C.C. acknowledged Tuesday that the deal could create risks “to the development of innovative online video distribution services.”þþSo, in certain cases, Comcast may be required to distribute certain programming on the Internet — if one of its rivals does so. “While you probably can’t make them be first, you probably can make them be second,” said a person familiar with the conditions. The person requested anonymity because the conditions had not been made public by the government. þþThe conditions also set up an arbitration process when disputes arise between Comcast and other cable providers over access to any of NBC Universal’s cable channels. þþ“We will be good to our word – and we will be respectful stewards of the strong and iconic assets of NBC Universal, particularly NBC News,” said David L. Cohen, an executive vice president at Comcast, in a letter about the regulatory approvals.þþWith the government approvals in hand, Comcast executives can now participate in management decisions at NBC Universal — which they have been champing at the bit to do — though they can not formally lead the company until the deal closes, according to an executive involved in the deal. The deal’s closing will happen after the end of the company’s next pay cycle, which is Jan. 28.þþþþ
Source: NY Times
