Merger Conditions Raise New Questions About Online Video Market

According to Adam Thierer, a senior research fellow at George Mason University's Technology Policy Program, the conditions imposed by the Federal Communications Commission in approving Comcast's merger with NBC Universal are "unprecedented" and amount to a "regulatory shakedown of a company that would do just about anything" to gain approval of the deal. He says that the conditions amount to a "death by a thousand cuts" that will make it difficult for Comcast to leverage the new content it is getting from NBCU for profit and will ultimately doom the transaction. One of the biggest concerns raised about the $30 billion merger related to its potential impact on the growing online video market. The conditions imposed by the FCC require Comcast-NBCU to provide other multichannel video programming distributors with access to any content that Comcast makes available online to its own subscribers; offer its video programming to "legitimate" online video distributors on the same terms and conditions available to multi-channel video programming distributors; and make its comparable programming available on "economically comparable prices" and conditions to an online video distributor that has entered into a deal to obtain programming from at least one of Comcast-NBCU's peers. Thierer said the conditions "foreshadow the rise of a compulsory license" for online video distribution.

University of Nebraska law professor Marvin Ammori said while online video distributors offer an opportunity to "counteract the media consolidation we've seen over the years," he rejected Thierer's notion that it will grow without any regulation. Cardozo Law School Professor Susan Crawford said the FCC's conditions on the merger get around the edges of trying to help open up the market for online video distribution without forcing Comcast into a new business. However, one of those potential competitors, ivi TV, argues that the FCC's conditions do not go far enough.