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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.

NBC's chief executive, Jeff Zucker, would remain as head of the joint venture, based in New York. NBC Universal owns 34 TV stations around the country and 13 cable networks, the biggest of which are USA, CNBC, MSNBC, Syfy, Bravo and Oxygen.

While NBC Universal is still highly profitable, some of its major holdings, particularly NBC and the Universal studio, are struggling. But NBC still has some significant assets, such as a contract with the NFL to broadcast games on Sunday nights and the rights to the 2010 Winter Olympics in Vancouver, B.C., and the 2012 Summer Games in London. It also has a prestigious news division that produces the top-rated morning show "Today" and gives its parent company stature in Washington via such programs as "NBC Nightly News With Brian Williams" and "Meet the Press." In addition, WRC has been the most popular local news station in Washington for more than a decade.

Comcast will contribute its cable-network group to the marriage, including such channels as E! Entertainment Television, Style Network, Versus, Golf Channel, Major League Baseball channel and 10 regional sports networks. Among the latter is Comcast Sports Network in Washington, which carries the Capitals, Wizards and University of Maryland basketball and football games locally.

Impact on online video

Public interest groups are particularly concerned about the deal's impact on the nascent but growing market for online video, where new operators such as Hulu, YouTube and Netflix are changing the media landscape with free or low-priced products.

Analysts say the merger will be a test for how regulators will deal with the Internet video market, which doesn't fall directly under the FCC's jurisdiction. But the agency is exploring competition in online video, and it could use the merger to implement conditions that would set guidelines for the burgeoning market.

"The transaction gives the FCC a vehicle to explore policy issues relating to Internet video in ways that might have negative implications for Comcast as well as other cable operators and satellite TV providers," said Paul Gallant, an analyst at Concept Capital.

The FCC imposed conditions on AT&T's merger with Bell South in 2005 that kept the company from controlling customers' Internet access, and consumer groups said they would seek similar rules in exchange for approval of the Comcast deal.

Ben Scott, head of policy for the public interest group Free Press, said such conditions would keep Comcast from potentially charging more for Disney content by metering Internet video consumption of those shows but not for NBC shows.

"A broadband provider has a financial incentive to prioritize that content over someone else," Scott said.

David Cohen, an executive vice president for Comcast, said in an interview that such concerns are being addressed in the FCC's net neutrality proceeding and shouldn't apply specifically to the merger. And he said that Comcast doesn't give better services or prices for its own content today.

"There is no incentive in this transaction for us to favor our content," Cohen said.

Competitors, meanwhile, said they are warily watching the deal.

Herndon-based RCN said Comcast doesn't abide by program-access rules and fears that with more content in its grasp, the company could hurt smaller cable competitors.

"Existing program access rules and prior merger conditions have been largely ineffective in controlling the discriminatory impact of Comcast's existing integration of content and distribution and would be woefully inadequate to mitigate the potential for anticompetitive actions by a combined Comcast-NBC entity," said Richard Ramlall, senior vice president of strategic and external affairs.

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