Comcast acquisition raises concerns

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Published: January 28,2010

Tags: mergers and acquisitions, television

WASHINGTON — Existing law would prevent Comcast Corp. from denying satellite TV providers and other rivals access to NBC Universal programming on reasonable terms once the cable TV operator takes control of the media company, Comcast’s chief executive said yesterday.

Satellite companies such as DirecTV Inc. and smaller cable companies fear that if regulators approve Comcast’s plan to acquire a majority stake in NBC Universal, Comcast would be able to drive up prices for — or even withhold — popular national and local programming, including NBC television broadcasts.

At a conference Wednesday on Internet and telecommunications policy, Comcast CEO Brian Roberts said program access rules established by a 1992 cable law would prohibit the company from abusing its control over NBC Universal to discriminate against competing subscription TV services.

Roberts also said the combination does not raise traditional media consolidation fears because NBC Universal is a media company while Comcast is primarily a content distributor.

Comcast has already offered a handful of pledges in hopes of convincing regulators that the deal wouldn’t hurt rivals and consumers. Those include a promise to extend existing program access rules to the local NBC and Telemundo stations it would acquire in the deal.

Those rules, which are enforced by the Federal Communications Commission, require cable companies to make their channels available to rivals on equal terms. But Comcast said they do not automatically apply to local broadcast programming, making its offer to extend the rules significant.

Many rivals, however, say that bringing a complaint to the FCC is slow and costly and that the commission doesn’t enforce the rules aggressively.

Comcast is currently seeking regulatory approval to acquire a 51 percent interest in NBC Universal from General Electric Co. The deal must be approved by the Justice Department and the FCC.

Comcast, the nation’s largest cable TV operator, has nearly 24 million cable customers and nearly 16 million broadband subscribers. It also owns some cable channels, including E! Entertainment and the Golf Channel.

NBC Universal would give Comcast the NBC and Telemundo broadcast networks; 26 local TV stations; popular cable channels such as CNBC, Bravo and Oxygen; the Universal Pictures movie studio and theme parks; and a stake in Hulu, which distributes TV programming online.

On Monday, Comcast filed paperwork with the Justice Department to comply with the Hart-Scott-Rodino Act, an antitrust law governing mergers and alliances. And on Thursday, it will file a public interest statement with the FCC, which must approve the transfer of NBC’s broadcast licenses.

Those filings are intended to give regulators a detailed understanding of the proposed transaction, including a full picture of the assets to be combined and the markets in which the companies operate. The paperwork will also offer a proposed framework for reviewing the merger, including an analysis of similar merger reviews in the past.

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