The media landscape changed Tuesday (Jan. 18) with the news that the Federal Communications Commission and the Department of Justice approved the $30 billion joint venture between Comcast and NBC Universal. The approval, with a number of conditions, clears the way for the largest cable company to gain unprecedented control over both content and distribution.
Comcast expects to close the joint venture by the end of the month, David Cohen, evp of Comcast, said in a telephone call with press and investors. Once the deal closes, the joint venture will be called NBC Universal.
As expected, only one of the five FCC commissioners dissented. Despite all the conditions made on the approval, it wasn't enough for commissioner Michael Copps, who has made no secret of his opposition to increasing media consolidation. "It confers too much power in one company's hands," said Copps in his dissenting statement.
The Department of Justice, which has been working with the FCC, also approved the deal with conditions, some of which mirror the conditions imposed by the FCC. To give the conditions teeth, the antitrust division of the DOJ filed a civil lawsuit in the U.S. District Court for the District of Columbia, to block the formation of the joint venture unless the company accepts the consent decree.
Most of the conditions detailed by the FCC and the DOJ have been reported in the press since chairman Julius Genachowski circulated the draft order on Dec. 23. None of the conditions require Comcast to divest any assets of the joint venture. However, the DOJ required the joint venture to relinquish its management rights in Hulu, which will require Comcast to exit the board of directors and forgo any voting rights, making it a passive, purely economic investor.
The conditions call for Comcast to further video competition by agreeing to open Internet requirements, akin to the FCC's recently passed net neutrality rules that prevent Internet service providers from blocking or discriminating against lawful content. It also must increase local news; expand ethnic and children's programming; and offer inexpensive broadband services to low-income Americans and schools. Many of the conditions were already well-publicized commitments Comcast made as the deal was being reviewed.
"There is nothing in this collection of conditions that would change the financials of the company," said Comcast's Cohen. "All of the commitments we have made, and conditions that we have agreed to, are wholly consistent with the manner in which we have always intended to conduct the Comcast and NBC Universal businesses. None of them will prevent us from executing on our business plans or will impair the competitiveness of any of our businesses."