Comcast-NBC Uni deal review under way

Process expected to take much of the year

NEW YORK -- The regulatory review process of the Comcast-NBC Universal deal, expected to take up much of the year, is formally under way now.

The largest U.S. cable giant on Thursday filed its public interest statement for the proposed transaction with the FCC just days after filing documents to kick off the Justice Department review.

Justice reviews deals for their competitive implications. Company filings for that purpose are not public.

Meanwhile, the FCC, led by new chairman Julius Genachowski, also concerns itself with public interest issues.

In its public FCC filing Thursday, Comcast expanded on its previous argument that buying a 51% stake in NBC Uni will not lead it to block out independent programmers and that it will actually have various public interest benefits.

Those benefits fall into all areas that the FCC has promoted, such as diversity, localism, competition and innovation, Comcast argued in the filing.

Of particular interest to many in the entertainment industry: Comcast made a clear commitment to the NBC broadcast business, vowing to invest in it and explore ways to make it more viable, and promised to innovate to bring content to consumers in new ways in the digital age.

Comcast also argued it won't gain undue market power.

"Given the intensely competitive markets in which Comcast and NBCU operate, as well as existing law and regulations (such as program access rules), this essentially vertical transaction presents no cognizable risk of harm in any market or to the public interest," its FCC filing said.

While critics have warned of the biggest vertical media deal in years, Comcast's FCC filing argued: "Experts and the Commission also have found that vertical combinations with limited horizontal issues generally do not threaten competition."

On the distribution side, it pointed to Comcast's basic cable user losses in recent years, while satellite TV and telecom firms have reported gains.

And even on the content side, the enlarged NBC Uni including Comcast's cable networks will remain the fourth-largest cable network owner behind Disney, Time Warner and Viacom. "Even after the transaction, approximately six out of every seven channels carried by Comcast Cable will be unaffiliated with Comcast or the new NBCU," according to the FCC filing.

In terms of commitment to programming of public interest, Comcast once again promised to invest in content for kids, women, minorities and politically interested consumers.

In a blog post, Comcast top lobbyist and executive vp David Cohen summarized: "By bringing together NBC's high-quality content with the technology and innovation of Comcast's technology platform, the new venture will increase the amount, quality, variety and availability of content more than either company could on its own, which will promote diversity."

Critics of the planned merger have been vocal about their concerns. A broad group of industry labor and consumer organizations -- ranging from the WGA, consumer advocacy group Free Press, the Parents Television Council, the American Cable Association and Common Cause to the Communications Workers of America union, Morality in Media, the National Association of Independent Networks and the National Consumer League -- earlier this month sent a letter to President Obama and members of Congress in opposition to the Comcast-NBC Uni deal.

"The merged giant would have strong incentives to discriminate against other multi-channel video providers in granting access to its wealth of programming, including all of its broadcast stations and "must-have" national and regional networks that air live or same-day sporting events, as well as the market power to enforce anticompetitive 'bundling,'" it said among other things.

But in a development Thursday that must be encouraging for Comcast, House judiciary committee chairman John Conyers Jr. and Congressman Henry Johnson, chairman of the Judiciary subcommittee on competition policy, lauded Comcast for the public interest commitments in its FCC filing, although they said they will for now withhold a final judgment on the deal.
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