NBCU, Comcast Mega-Merger to Face Legislative Hurdles

There’s nothing like a $30 billion media mega-merger to get public policy watchers’ tongues wagging in the nation’s capitol. Nearly simultaneous with the announcement from Comcast and NBC Universal that they intended to merge operations, the Free Press and Consumer Federation of America released their own white paper analysis arguing the deal poses a major threat to competition that would harm the public interest.

Unprecedented in its combination of distribution and content, the merger must be blessed by several government regulators, the Federal Communications Commission (which is just now teeing up review of media ownership rules), the Federal Trade Commission as well as several international agencies.

Anticipating a rocky review, Comcast has already posted an open memo on its merger site from Comcast’s executive vp David Cohen. In the letter, Cohen addresses what are likely to be the hot button issues as regulators scrutinize the merger—such as affiliate relations; retransmission agreements with NBC TV network’s 234 affiliates and the 26 owned-and-operated NBC and Telemundo stations; children’s programming; managing news; and local and public interest programming.

“We are prepared to make affirmative commitments to ensure that the pro-consumer and public interest benefits of the transaction are realized,” said Brian Roberts, chairman and CEO of Comcast. “Today we have announced a number of initial commitments that expand on the capabilities that Comcast and NBCU have built over the years, and the new opportunities that this combination makes possible.”

Whether that appeases regulators remains to be seen. Under a more activist Obama administration, it could be a very long year.

“The pundits who are predicting this merger will be a cakewalk haven’t done a careful analysis of the damage it will do to the competitive fabric of the video marketplace,” said Mark Cooper, research director for the Consumer Federation of America. “This merger’s potential to foreclose competition and stifle innovation is significant and real.”

In its report, the Free Press and Consumer Federation of America suggest federal authorities should require the merger to divest the TV stations; require nondiscrimination in carriage of unaffiliated programming on cable systems owned by Comcast; and ensure the availability of Comcast/NBC content on an unbundled basis to other multichannel video distributors and Web sites at fair and reasonable rates, terms and conditions.