|Page 2 of 2 <|
Federal regulators approve Comcast's acquisition of NBC Universal, with asterisks
Some consumer groups said that the conditions on online video deals could help create first-time guidelines for the nascent but growing space. Cable subscriptions declined for the first time in the third quarter of 2010 as online video viewing boomed. Online streaming videos from Netflix account for 20 percent of all bandwidth consumption during peak Internet hours, according to Sandvine, an analytics firm.
The conditions appear to "provide the trigger for broader regulatory reform, while providing additional momentum for the development of the Internet as a platform for video competition," said Mark Cooper, a director at the Consumer Federation of America.
In the deal, Comcast agreed to share NBC channels to online video providers who strike deals for similar content with competitors. For example, if YouTube struck a deal with Viacom to carry streaming online reality shows from MTV, Comcast would be compelled to negotiate similar deals with YouTube for reality shows such as Bravo's "Real Housewives."
The FCC and Justice also demanded that Comcast relinquish its management stake in Hulu, the online joint venture NBC has with News Corp. and Walt Disney. But Comcast would be able to keep its financial stake in the Web site.
The list of conditions pleased some public interest groups but may rile some competing companies. Walt Disney and News Corp. warned FCC members last week against conditions that would insert the government into the online video market, saying that such mandates could harm their own business deals. In addition, a government order that NBC stations enter deals with nonprofit local news outlets could create more competition for profit-making news organizations in the same towns.
Comcast said the conditions were appropriate for its transaction.
"I think all the conditions are crafted in a way that enables us to operate our business in an effective way," said David Cohen, Comcast's executive vice president. "Whether based on experience that we have with these conditions that future regulatory or legislative activity is appropriate, I think we would have to visit that at the time."
Analysts said that if history is a guide, a similar merger between Time Warner and America Online showed the difficulties of melding businesses with too many disparate interests.
"There is a lot more evidence that this doesn't work than it does," said Craig Moffett, an analyst at Sanford C. Bernstein. "But everyone will watch to see if Comcast can achieve what no one else has, but it's not going to be easy."