Feds approve Comcast merger with NBCU

The federal government approved the $30 billion joint venture between Comcast and NBC Universal (NBCU) this week, making it the first time a cable company will control a major broadcast network. It is expected that the deal will close at the end of January.

The FCC and Justice Department gave their approvals on Tuesday with a number of conditions attached in an effort to keep Comcast from restricting access to NBC’s programming.

The FCC approved the joint venture by a vote of 4 to 1, with the senior Democrat commissioner, Michael J. Copps, casting the dissenting vote. Copps said the merger “confers too much power in one company’s hands.”

The FCC emphasized its approval of the joint venture “with conditions and enforceable commitments.” As part of the merger, the commission said, Comcast-NBCU will be required to take affirmative steps to foster competition in the video marketplace.

In addition, Comcast-NBCU will increase local news coverage to viewers; expand children’s programming; enhance the diversity of programming available to Spanish-speaking viewers; offer broadband services to low-income Americans at reduced monthly prices; and provide high-speed broadband to schools, libraries and underserved communities.

The FCC’s conditions, which generally will remain in effect for seven years, mainly focus on net neutrality, an effort being made by the FCC to protect online video competition. The following are among the FCC’s mandates:

  • Comcast is required to protect the development of online competition by offering its programming to legitimate online video distributors on the same terms as other cable and satellite providers.
  • Comparable programming must be made available at economically comparable prices, terms and conditions to an online video distributor that has entered into an arrangement to distribute programming from one or more of Comcast-NBCU’s peers.
  • Stand-alone broadband Internet access services must also be offered at reasonable prices and of sufficient bandwidth so customers can access online video services without the need to purchase a cable TV subscription from Comcast.
  • Comcast cannot enter into agreements to unreasonably restrict online distribution of its own video programming or the programming of other providers. It must not disadvantage rival online video distribution through broadband Internet access services and/or set-top boxes.
  • Comcast cannot exercise corporate control over or unreasonably withhold programming from Hulu. The cable provider has agreed to give up NBC’s management role in Hulu while retaining a financial stake in the business.

The FCC also imposed public interest requirements on diversity, localism and broadcasting. For example, to protect the integrity of OTA broadcasting, network-affiliate relations and fair and equitable retransmission consent negotiations with the joint venture, the commission adopted a series of conditions that were independently negotiated between the applicants and various network affiliates.

To promote broadcast localism, Comcast-NBCU must maintain at least the current level of news and information programming on NBC and Telemundo’s O&O broadcast stations, and, in some cases, expand news and other local content. NBC and Telemundo O&O stations also will provide thousands of additional hours of local news and information programming to their viewers, and some of its NBC stations will enter into cooperative arrangements with locally focused nonprofit news organizations. Additional free, on-demand local programming will be made available as well.

Comcast-NBCU will also increase the availability of children’s programming on its NBC and Telemundo broadcast stations and add at least 1500 more choices to Comcast’s on-demand offerings for children. It will provide additional on-screen ratings information for original entertainment programming on the Comcast-NBCU broadcast and cable TV channels and improved parental controls. Comcast-NBCU also will restrict interactive advertising aimed at children 12 years old and younger and provide public service announcements addressing children’s issues.

Embedded in the conditions is a rule that specifically benefits Bloomberg L.P., the financial news giant that owns Bloomberg Television. The FCC said that Comcast must not favor its own content over competitors’ content on its cable systems. Specifically, the commission said that “if Comcast neighborhoods its news (including business news) channels, it must include all unaffiliated news (or business news) channels in that neighborhood.”

In the deal, Comcast will own CNBC, a rival to Bloomberg TV. Bloomberg wanted to make sure that if Comcast clusters news channels, it won’t leave Bloomberg TV out of that group. Bloomberg had lobbied for the condition for the better part of a year.