Comcast/GE/NBCU Pitch Deal To FCC

With a lengthy pitch on the public interest value of creating a new content-focused joint venture that will boost quantity, quality, diversity and "local focus," Comcast, NBCU and GE jointly filed a merger application/public interest statement with the Federal Communications Commission Thursday (Jan 28), launching what will likely be an almost year-long review.

That followed the filing earlier in the week with the Justice Department, which will look at competitive issues only. The FCC's review goes beyond competition to look at the public interest impact of the deal, hence the lengthy filing (136 pages) accompanying the request for transfer of various cable and broadcast licenses. The $30 billion deal will also get scrutiny on Capitol Hill in hearings beginning next week. The document lays out the public interest benefits in terms of the FCC's four key interests: localism, diversity, competition and innovation. It argues that the deal promotes the first by increasing the quality and variety of content more than either company could do alone. With its commitment to boost local news programming by 1,000 hours on the O&O stations, as well as increase children's and family programming and more, it argues that it is promoting localism. The deal will spur the competition to up its game, which takes care of number three, they argue, and the new company will experiment with new business models and distribution platforms that will spell innovation. The document also argues that the transaction violates no FCC rules and is not even the sort of media concentration the FCC is traditionally concerned about regulating through market or cross-ownership limits.

The suggestion by Comcast and GE that the FCC didn't need to get into the online access issue was tabbed as "incredulous" by Public Knowledge Legal Director Harold Feld. "When the Commission considers any conditions to this transaction, it must take into account both existing online competitors and those the Commission hopes will emerge. The Commission must make certain competitors will have access to Comcast and NBC programming as the online market evolves," he said.

Free Press Executive Director Josh Silver called "positively Orwellian" the suggestion that the deal was pro-consumer. "Comcast's reputation for customer service ranks about one rung above Enron and Blackwater. The idea that it is magically going to be consumer friendly after it gets bigger doesn't pass the laugh test. Regulators at FCC and the Department of Justice should cut through the rhetoric and put a spotlight on the real problems with this kind of unprecedented media consolidation," he said.

American Cable Association President Matt Polka said the conditions were "totally porous and inadequate." He also took aim at the pledge to apply program access rules to retransmission consent agreements. "This 'commitment' isn't without irony, given that Comcast is asking a federal appeals court to tear up those rules and toss them in the wastebasket," he said.

Media Access Project's Andrew Schwartzman was on the same page. "My initial review suggests that Comcast has done nothing to address the most serious problems posed by the transaction," he said. "One thing that stands out is Comcast's assurance that existing regulations adequately address program access provisions at the same time that the cable industry is challenging them in court."

House Judiciary Committee Chairman John Conyers (D-MI) "applauded" the public interest filing made by Comcast and NBCU as they launched FCC review of the deal, though he suggested some of his own additional conditions: a commitment to independent programming, access to sports programming, and "ensuring consumers still have access to their favorite shows online for minimal or no cost."