Justice Department OKs Comcast-NBCU with Strings Attached

Comcast must license programming to online competitors, subject itself to “anti-retaliation provisions” and adhere to network neutrality requirements.
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WASHINGTON: The Department of Justice on Tuesday announced a settlement that allows the merger of Comcast and NBC Universal contingent on competitive access. Justice said it was allowing the deal on the condition that Comcast license programming to online competitors, subject itself to “anti-retaliation provisions” and adhere to network neutrality requirements.

The Department of Justice’s Antitrust Division, along with five state attorneys general, filed a civil antitrust lawsuit today in U.S. District Court for the District of Columbia, to block the transaction. The suit alleges that the transaction would allow Comcast to limit competition. The parties also filed a proposed settlement that, if approved by the court, would resolve the competitive concerns in the lawsuit. The participating states are California, Florida, Missouri, Texas and Washington.

The Justice Department’s proposed settlement contains conditions similar to those imposed by the Federal Communications Commission, which also approved the merger today. The conditions require Comcast to make the same package of broadcast and cable channels it sells to traditional video providers available at reasonable terms to online video distributors. Should a licensing dispute arise, Justice could seek court enforcement of its settlement or allow the complainant to compel commercial arbitration.

The FCC order also allows Comcast’s traditional pay TV competitors, such as satellite and telephone companies, to invoke arbitration at the FCC to resolve program access and retransmission consent disputes. The Justice Department settlement enjoins Comcast from retaliating against non-affiliated programmers who sell content to Comcast competitors. Comcast must also relinquish management rights of Hulu, the online joint venture owned by NBCU, News Corp. and Disney.

It must also abide by the FCC’s recently adopted network neutrality rules, and provide broadband service of at least 12 Mbps in markets where it has upgraded systems. It cannot impose licensing terms on online video distributors, “with narrow exceptions,” Justice said.

The approved deal allows Comcast to take a 51 percent stake of NBCU from General Electric. The resulting joint venture will comprise Comcast’s cable systems with 23 million subscribers, its own and NBCU’s national and regional cable networks and digital properties, the NBC and Telemundo broadcast networks and TV stations, Universal Pictures, Universal Studios and Focus Films. The transaction is valued at $30 billion.

-- Deborah D. McAdams