Comcast-NBCU union likely to face big regulatory challenge

Computerworld - Federal regulatory approval of the vast Comcast-NBC Universal joint venture announced today could be intense and could last longer than the full year that top officials at the two media companies suggest.

A variety of consumer interest and net neutrality proponents, as well small broadcasters, raised concerns about the deal today. Those concerns include that the new entity could stifle competition from small Internet video-streaming companies and pose threats to consumer privacy through data collected with new interactive cable technology.

Already, U.S. Rep. Henry Waxman, chairman of the U.S. House Committee on Energy and Commerce, has raised red flags about the deal and has promised to hold hearings on it.

It is "imperative" that the Federal Communications Commission, the Federal Trade Commission and the Justice Department "rigorously assess whether this transaction is in the public interest," Waxman said. The FCC said through a spokeswoman that the agency is committed to a "thorough, fair and fact-based ... review" of the merger.

Waxman said he is concerned not only about competition issues, but also the future of the production and distribution of video content across broadcasting, cable, online and mobile platforms.

The joint venture, valued at $37 billion, would control 82% of cable programming channels, according to Comcast officials. Regulators will be concerned whether Comcast, operating in certain cities where it dominates cable TV access, could limit access to its video content by other cable providers. The agency will also be watching whether Comcast could limit access to its content to emerging video providers that use wired or wireless networks, said two antitrust experts.

"It's hard to tell whether there are serious antitrust claims to be made, but claims and assertions have been made that, once merged, Comcast might have incentives to favor its own media content versus other content distributed through its cable distribution network," said Keith Hylton, a professor at Boston University School of Law, in an interview. In addition, Comcast's future video content might somehow be restricted from other sources of television traffic, such as rival Verizon DSL, he added.

Antitrust attorney Brian Weinberger, at the firm of Buchalter Nemer in Los Angeles, said in an interview that he expects "serious scrutiny" of the merger by various regulatory agencies that could last 18 months, because so many third parties will want to weigh in with comments.

Weinberger said industry groups representing sports programmers, among others, might object to the merger, noting NBC's strong coverage of sporting events, including the Olympics.

"They could well lobby for some restriction on NBC's access rights," he said.

The FCC will probably review city-by-city the amount of cable and Internet distribution that Comcast currently has, and will likely stipulate how it distributes content in each location, Weinberger said.