FCC approves Comcast-NBC deal, with conditions; DOJ approval expected

As expected, the FCC today approved a merger between Comcast and NBC Universal - with conditions. Approval of the deal by the other government agency reviewing it - the Justice Department - also is expected today, with conditions.

The FCC voted 4-1 in favor of the deal, with commissioner Michael Copps, a Democrat, opposed. Copps, in a statement, expressed concerns that the merger puts too much power in the hands of a single company and warned that a joint venture between the network and the cable TV operators "opens the door to the cable-ization of the open Internet. The potential for walled gardens, toll booths, content prioritization, access fees to reach end users, and a stake in the heart of independent content production is now very real.”

To protect the development of online competition, the commission is requiring that the joint company, among other things:

• will offer its video programming to legitimate online video distributors on the same terms and conditions that would be available to a multichannel video programming distributor.
• will offer standalone broadband Internet access at a reasonable price and of sufficient bandwidth to allow customers to access online video services without being required to purchase a cable TV subscription
• will not enter into agreements to unreasonably restrict online distribution of its own video programming or programming of other providers.
• will not disadvantage rival online video distribution through its broadband Internet access services and/or set-top boxes.
• will not exercise corporate control over or unreasonably withhold programming from Hulu.
• will make available to about 2.5 million low income households: (i) high-speed Internet access service for less than $10 per month; (ii) personal computers, netbooks, or other computer equipment at a purchase price below $150; and (iii) an array of digital literacy education opportunities.
• will expand its existing broadband networks to reach approximately 400,000 additional homes, provide broadband Internet access service in six additional rural communities, and provide free video and high-speed Internet service to 600 new anchor institutions, such as schools and libraries, in underserved, low-income areas.
• will maintain at least the current level of news and information programming on NBC’s and Telemundo’s owned-and-operated (“O&O”) broadcast stations, and in some cases expand news and other local content.
• will increase the availability of children’s programming on its NBC and Telemundo broadcast stations, and add at least 1,500 more choices to Comcast’s on-demand offerings for children.  It will also provide additional on-screen ratings information for original entertainment programming on the Comcast-NBCU broadcast and cable television channels and improved parental controls, as well as restrict interactive advertising aimed at children 12 years old and younger and provide public service announcements addressing children’s issues.
• will increase programming diversity by expanding its over-the-air programming to the Spanish language-speaking community, and by making NBCU’s Spanish-language broadcast programming available via Comcast’s on demand and online platforms.

In his lengthy statement, Commissioner Copps expressed additional concerns about the future of public broadcast stations, as well as the commitment to quality journalism in the news divisions. He wrote:

As for the future of America’s news and journalism, I see nothing in this deal to address the fundamental damage that has been inflicted by years of outrageous consolidation and newsroom cuts.  Investigative journalism is not even a shell of its former self.  All of this means it’s more difficult for citizens to hold the powerful accountable... Given that this merger will make the joint venture a steward of the public’s airwaves as a broadcast licensee, I asked for a major commitment of its resources to beef up the news operation at NBC.  That request was not taken seriously.  Increasing the quantity of news by adding hours of programming is no substitute for improving the quality of news by devoting the necessary resources.  Make no mistake: what is at stake here is the infrastructure for our national conversation—the very lifeblood of American democracy.  We should be moving in precisely the opposite direction of what this Commission approves today

In a post last year, Larry Dignan highlighted some of the Internet-related significance of the deal, looking at the two companies as online content provider and broadband pipeline. In that post, he noted that there are a number of Internet-related assets that could stem from the approval of this deal. They include:

• Comcast has the broadband network (distribution).
• Comcast-NBC would have several of the top properties regularly ranked in comScore’s top 50.
• Comcast would have a stake in Hulu via NBCU.
• Comcast would have a large women’s network (iVillage via NBCU).
• Comcast would continue with its TV Everywhere initiative.

The deal, which has been under review for more than a year, was given a preliminary thumbs-up by FCC Chairman Julius Genachowski just before Christmas. In a statement today, Genachowski said the approval by the FCC is structured to "spur broadband adoption among underserved communities; to increase broadband access to schools and libraries; and to increase news coverage, children's television, and Spanish-language programming."