Comcast-NBC Merger Approved Upon a Myriad of Conditions

by Matt Klassen on January 19, 2011

Late last year I wrote about the American cable and wireless giant Comcast’s push to obtain a majority stake in the television and silver screen megalith NBC Universal, a move that would effectively make Comcast one of the biggest, most influential players in the American entertainment market.

While many consumer advocacy and free market groups circulated petitions in an attempt to block the merger on anti-competition grounds, it looks like it was all to no avail, as the Federal Communication Commission (FCC) and the U.S. Department of Justice (DOJ) both approved the deal yesterday morning, setting up the country’s first merger between a cable and wireless company and a major TV network.

But with the obvious consumer hatred of Comcast aside, one of the major concerns was that this merger would give Comcast both the incentive and the ability to monopolize the cable television and movie industries, potentially leading Comcast to favour its own content as opposed to cable content from its competitors.

So do we have to worry about Comcast monopolizing the entertainment industry? The FCC certainly doesn’t think so, as the Commission has attached a veritable laundry list of provisos, stipulations, and conditions to the deal in an attempt to keep Comcast playing fair with the rest of the industry.

Subject to whims of highly paid and highly influential lobbyists, there was never really a question in my mind whether or not the five (5) voting members of the FCC would approve this merger. But to approve the merger while simultaneously recognizing that the deal could create threats to “to the development of innovative online video distribution services,” I find that simply astounding.

Through taking even a cursory glance through the myriad of press releases covering this acquisition, I got the sense that neither the FCC nor the DOJ wanted to really approve this merger, but for whatever reason, succumbing to whatever unknown pressures, the deal was passed 4-1, with the only dissenting vote coming from Democratic Commissioner Michael J. Copps, who made his concerns known that this deal would give Comcast far too much power over entertainment and news markets across the country.

To assuage their guilt over approving a merger and then singing its praises for the benefits it will bring to the American consumer, the members of the FCC and the DOJ put in more provisos, stipulations, and conditions then you’d find in a Hollywood couple’s prenuptial agreement, in hopes that they could prevent Comcast from unfairly controlling the American media.

One of the key areas where potential conflict of interests now lie is with online streaming video sites such as Hulu, who’s board of directors includes representatives from ABC, FOX, and NBC Universal, a site that Comcast clearly sees as a direct competitor to its own online streaming video service. For their parts, both the FCC and the DOJ included specific restrictions in regards to Hulu, with the DOJ demanding that Comcast relinquish all management rights in Hulu, and the FCC demanding that Comcast not withhold programming from Hulu and forbidding them from unreasonably restricting the availability of NBC programming on any legitimate Hulu-esque streaming site.

But will such restrictions be enough to keep Comcast honest, or will we soon see Comcast exerting its draconian control over the entertainment media? If I were a betting man I would certainly put money on the latter, as I’m sure that Comcast keeps its merger promises about as well as its customer service department actually serves its customers.

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