FCC Approves Comcast-NBCU Joint Venture
Almost one year since Comcast and General Electric Company (GE) announced plans for Comcast to purchase assets of NBC Universal (NBCU), the Federal Communications Commission (FCC) granted approval of the $30 billion joint venture. GE will be allowed to assign and transfer control of broadcast, satellite and other spectrum licenses to Comcast.
The Comcast/NBCU joint venture will be 51-percent owned by Comcast, which has the option of buying GE’s 49-percent interest during the next three to seven years.
Following the 4-1 vote, FCC Chairman Julius Genachowski commented, "After a thorough review, we have adopted strong and fair merger conditions to ensure this transaction serves the public interest." Democratic Commissioner Michael Copps was the dissenting vote, saying in a statement the deal "reaches into virtually every corner of our media and digital landscapes and will affect every citizen in the land…this Comcast-NBCU joint venture grievously fails the public interest."
Commitments imposed on the merger have Comcast-NBCU increasing local news coverage to viewers; expanding children’s programming; enhancing the diversity of programming available to Spanish-speaking viewers; offering broadband services to low-income Americans at reduced monthly prices; and providing high-speed broadband to schools, libraries and underserved communities.
Targeted conditions and commitments, which generally will remain in effect for seven years, in part have the FCC establishing for rival multichannel video programming distributors (MVPDs) an improved commercial arbitration process for resolving disputes about prices, terms, and conditions for licensing Comcast-NBCU’s video programming.
The commission adopted conditions pertaining to online video content, in which Comcast/NBCU must provide to all MVPDs (at fair market value and non-discriminatory prices, terms, and conditions) any affiliated content that it makes available online to its own subscribers or to other MVPD subscribers.
Comcast/NBCU also must offer standalone broadband Internet access services at reasonable prices and of sufficient bandwidth so that customers can access online video services without the need to purchase a cable TV subscription from Comcast.
Although Comcast is not required to divest its ownership stake in Hulu, it has agreed to “not unreasonably restrict” online distribution of its own video programming or programming of other providers; to not disadvantage rival online video distribution through its broadband Internet access services and/or set-top boxes; and to not exercise corporate control over or unreasonably withhold programming from Hulu.
The American Cable Association, which has followed the proposed deal closely this past year, issued a statement commending the FCC for imposing meaningful conditions. The ACA’s statement said:
"Specifically, the FCC provided two key remedies for smaller pay-TV operators:
"Pay-TV providers with up to 1.5 million video subscribers can jointly designate a bargaining agent that has the right to take Comcast-NBCU to baseball-style commercial arbitration to resolve impasses in negotiations involving not only Comcast-NBCU’s local and regional programming, but also its national cable programming; and
"Pay-TV providers with 600,000 or fewer video subscribers can utilize baseball-style commercial arbitration with a new asymmetrical cost recovery process in which these smaller operators have the right to recover their arbitration costs from Comcast-NBCU if they win their arbitration. If they do not prevail, they would be responsible for only their own legal fees and costs."
The U.S. Department of Justice also approved the joint venture.
-Linda Hardesty
