Planned Comcast-NBC merger ignites TV access battle

Comcast has bought a controlling stake in NBC Universal. The move creates the country's largest entertainment conglomerate.
By Cecilia Kang
Washington Post Staff Writer
Friday, December 4, 2009

Comcast, the nation's biggest cable and broadband Internet company, on Thursday announced plans to take over NBC Universal, creating a new kind of media colossus that would not only produce some of America's most popular entertainment but also control viewers' access to it.

The roughly $30 billion deal set off immediate reaction from consumer groups and lawmakers in Washington, heralding an epic regulatory battle over concentrating so much power in one company. Almost one in four cable subscribers in the U.S. is a Comcast customer. NBC Universal owns cable networks such as Telemundo, MSNBC and Bravo, TV shows such as Jay Leno's, regional stations such as Washington's WRC (Channel 4), and Universal movie studios.

Sens. John D. Rockefeller IV (D-W.Va.), chairman of the Commerce Committee, and Herb Kohl (D-Wis.), chairman of the Judiciary antitrust subcommittee, called for hearings to review the deal's impact on television competition and consumers. Michael J. Copps, a Democratic member of the Federal Communications Commission, said that the merger faces a "very steep climb with me" and that it raises many doubts over whether it would be in the public's interest.

Analysts said the deal would face a lengthy regulatory review -- from one year to 18 months -- but would probably be passed with significant conditions. A great part of the debate for federal regulators will be how the merger would impact the future of television programming, which will be viewed online on mobile devices and computers as well as on the box in American living rooms.

"My long-standing skepticism about the harms imposed by so few controlling so much persists," said Copps, a staunch advocate of media-ownership rules that prevent consolidation between newspapers and broadcasters in the same market.

Critics worry that the consolidation of the two big companies could drive up cable TV bills and make some content off limits to anyone who doesn't subscribe to Comcast's services. The Philadelphia company has said it wants to keep NBC and Univeral entertainment available to the widest possible audience. It did not address the cost issue on Thursday.

The deal also must overcome the poor track record of previous mergers between media giants, most notably the disastrous pairing of AOL and TimeWarner.

In a conference call, Comcast chief executive Brian Roberts touted the synergies of the merger, saying the acquisition would further his family's vision of developing the company into an entertainment powerhouse from its humble beginning as a single cable system operator in rural Mississippi. Roberts said he thought the deal was "approvable" by regulators.

"This is pro-consumer and is going to accelerate what I believe consumers want, which is to access all different types of content on different platforms at different times," he said.

Appeasing regulators

Comcast made several commitments to fair play in the television market to appease regulators. The company said it would keep NBC's local television stations and expand programming to diversify its offerings. It said it would abide by program access rules that require it to share shows and channels with competitors.

The FCC will review the deal to see whether it benefits the public. Antitrust watchdogs at the Justice Department or Federal Trade Commission will scrutinize whether it would harm competition in the market.

Under the deal, which has been in the works for months, Comcast would pay $6.5 billion in cash upfront and contribute $7.25 billion in cable assets to acquire a 51 percent stake in NBC Universal from its current owner, General Electric, which would retain a 49 percent stake. Comcast would control the joint venture's day-to-day operations. GE would take $9.1 billion in debt to finance the deal. In all, the joint venture would control more than one out of every five television-viewing hours.

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