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Condition-heavy approval given to Comcast-NBCU merger by FCC and DOJ

By Tim Conneally, Betanews

Today, the Federal Communications Commission conditionally approved the license transfers to create the Comcast-NBCU joint venture that contains the media content from Comcast and NBCU’s properties. The FCC voted 4-1 in favor of the transaction with Commissioner Michael Copps casting the only dissenting vote. Simultaneously, the Department of Justice has approved the FCC’s proposed content licensing conditions, but the Antitrust division has not yet given clearance to the merger.

“This is the most intense review the FCC has ever run for a single transaction,” FCC officials said today.

The commission’s main concerns with the transaction revolved around ensuring reasonable program access by competitors and consumers, encouragement of local programming, and equal accessibility to local and multi-lingual content. The commission imposed restrictions to allow rival Multichannel Video Programming Distributors to get access to the content owned by the joint venture (“offline”) and restrictions to give OVDs (“Online Video Distributors”) equal access to content.

“It is with far more comfortable optimism than fearful skepticism that I vote to affirm the joint venture between Comcast and NBC Universal. My staff and I collectively spent hundreds of hours dissecting the order and debating new language, envisioning how the potential harms could quickly become sad realities, and ways in which we could safely prevent them,” Commissioner Clyburn said in the FCC’s hearing Tuesday. “At all times, at the front of my mind, was whether or not this transaction is in the best interest of the public, and if it would end up doing more damage than good. I stressed over the thought of looking back at this, many years from now, and wishing that I could rescind my vote due to all of the negative effects that resulted from the merger of these two companies. But after all of my hesitation, soul-searching, and long hours of review, I am confident that, if the parties live up to the terms of the voluntary commitments from the applicants and the conditions that we have imposed on them, this transaction will result in more benefits to consumers than harms.”

Of course, Hulu has been one of the biggest concerns in the merger proceedings. The FCC today said no divestiture from Hulu has been demanded of Comcast, but the operator is supposed to relinquish managerial control in the online video distribution site.

“Without such a remedy, Comcast could, through its seats on Hulu’s board of directors interfere with the management of Hulu, and, in particular, the development of products that compete with Comcast’s video service,” a statement from the FCC said.

The other half of the joint venture’s approval came today from the U.S. Department of Justice, which announced that it approved the licensing structure for Comcast and NBC Universal that the FCC laid out.

“The proposed settlement will preserve new content distribution models that offer more products and greater innovation, and the potential to provide consumers access to their favorite programming on a variety of devices in a wide selection of packages,” the Department of Justice said today.

However, the Antitrust division, along with five state attorneys general (CA, FL, MO, TX, WA) have filed a civil antitrust lawsuit in the District Court of Washington DC, which alleges that the transaction could let Comcast limit competition from its cable, satellite, telephone, and online competitors. The lawsuits include settlement proposals from the five states.

“The Antitrust Division worked in close cooperation and unprecedented coordination with the Federal Communications Commission (FCC) to reach a result that fully protects competition, allowing businesses to bring new and innovative products to the marketplace, providing consumers with more programming choices,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The conditions imposed will maintain an open and fair marketplace while at the same time allow the innovative aspects of the transaction to go forward.”

Copyright Betanews, Inc. 2010

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