Comcast, NBC Universal executives meet with regulators on $30 billion merger deal
Thursday, December 10, 2009
Comcast chief executive Brian Roberts this week tried to allay concerns that the $30 billion deal between his cable company and NBC Universal would lead to less choice in programming and a retreat from local broadcasting.
The deal, announced last week, will go before antitrust watchdogs at either the Justice Department or Federal Trade Commission. The Federal Communications Commission will also determine if the deal benefits the public as it decides whether to approve the transfer of broadcast licenses in the deal. Analysts generally expect the merger will be approved by regulators -- particularly at the FCC -- who have some latitude to attach conditions to the merger that could pave the way for competition in the nascent but fast-growing market for Internet video.
Roberts and NBC Universal executives want the deal to be viewed as a straight transaction between a cable company and media giant.
What they don't want, according to the executives who visited The Washington Post last week, is for regulatory reviews to get muddled in murkier discussions about how the merger will impact the future of television since more viewers get their shows over the Internet.
"Today NBC makes certain content available online, and I can't imagine we will change that process," Roberts said in a meeting with The Post's editorial board and newsroom reporters and editors.
Roberts and NBC Universal chief executive Jeff Zucker met Tuesday with Julius Genachowski, chairman of the FCC. They also met with Democratic Commissioners Michael Copps and Mignon Clyburn and Republican Commissioner Robert McDowell. They didn't meet with Republican Commissioner Meredith Attwell Baker because she was on business travel.
The FCC didn't comment on the meetings. But Roberts said the FCC discussions were intended to brief regulators on the deal and to reiterate what it views as public interest commitments to local broadcasting and program-access rules that require Comcast to share content with other cable and satellite competitors.
"Today was the beginning of the process, kicking off what will be a thorough review," Roberts said. He reiterated that regulatory scrutiny of the deal could take between nine months and one year.
Some analysts think it could go longer than that. Copps, for instance, has already questioned how the deal would affect cable prices for consumers and whether the merger pointed to a pressing need for new open-Internet rules that are already being crafted by the FCC. Those rules would prevent Comcast from prioritizing its own content or blocking that of others. Imagine Comcast, for example, giving priority to its Universal movies on the Web over that of competitors. Copps said the deal would "face a very steep climb with me."
Gigi Sohn, the executive director of Public Knowledge, a public interest group, warned that the deal could lead to less choice in programming and higher prices -- particularly for those who watch video over computers.
"With all that programming under its control, Comcast will have every incentive to take its shows off of the Internet and force consumers to buy a cable subscription to get online access to that programming," she said. "Want to watch reruns of '30 Rock?' Buy a Comcast subscription."
Roberts and Comcast Executive Vice President David Cohen said debates over online video distribution shouldn't be tangled in a regulatory review of the merger. Cohen has said the deal should be viewed as a straight vertical merger, where exclusionary concerns are already largely addressed by program-access rules already in place for the cable industry.