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Policy Watch: Who's Afraid of Comcast-NBC?

The Federal Communications Commission (FCC) docket got a workout Monday as the deadline for initial comments on the proposed $30 billion Comcast Corp. (Nasdaq: CMCSA, CMCSK)-NBC Universal merger loomed. (See Comcast: NBCU Deal Won't Kill Web TV Players and Comcast to Take Control of NBC Universal.)

Here's a brief rundown of who said what during this round.

  • WealthTV, a hi-def channel that had previously fought with Comcast over carriage (and lost), came out against the deal. Among the conditions sought in its petition, WealthTV wants the FCC to force Comcast to carry "all established independent networks." Soon after announcing the proposed deal, Comcast committed to add two such channels per year for the next three years. WealthTV obviously wants a larger commitment.

  • Financial news company Bloomberg LP is also against the deal, arguing that Comcast, by owning the content and the pipe that delivers it, "will have every reason to undermine the many independent news, sports and entertainment channels that compete with the channels it owns." The Los Angeles Times notes that Bloomberg's biggest concern is that Comcast could give CNBC a better channel slot than competing networks. The letter was co-signed by the Communications Workers of America, National Consumers League, the Writers Guild of America, and a bunch of consumer advocacy groups.

  • DirecTV Group Inc. (NYSE: DTV), one of Comcast's largest competitors, said the combination of Comcast's and NBC's assets "will materially change the bargaining dynamic for programming controlled by the new conglomerate." Fellow satellite TV giant Dish Network LLC (Nasdaq: DISH) told the Commission that the deal "poses a direct threat" to the satellite TV industry, harboring fears that Comcast might withhold some content from rivals.

    Comcast, meanwhile, offered a warning that some competitors and programmers "appear to be attempting to use the transaction review process as an opportunity to seek advantages and concessions outside of marketplace negotiations. We believe these efforts should be rejected."

  • NBC's broadcast affiliates signed a letter supporting the merger after receiving assurances that Comcast would remain committed to over-the-air TV and not shift broadcast sports to the cable network domain.

  • The American Cable Association (ACA) , an organization that represents Tier 2 and 3 operators, isn't rejecting the deal, but it did outline a wide range of concerns, including the deal's potential effect on programming pricing to ACA's members, which aren't subject to the same volume discounts as are larger MSOs. Among the potential trouble spots, ACA identified six markets where the combined company would own a broadcast TV station, NBC's cable-fed networks, and Comcast's regional sports network: Chicago, Philadelphia, San Francisco, Miami, Washington, and Hartford, Conn.

  • Just to eliminate any confusion here, Comcast is, of course, in favor of the deal, replaying the commitments it outlined when it made its public interest filing. Among those commitments, Comcast pledges to sustain NBC's free, over-the-air programming, retain the church-and-state barrier with NBC's news division, and beef up children's programming. Comcast also shed more light on support for the deal from the Governors of California, New York, and Pennsylvania, and the mayors of Los Angeles, Philadelphia, Las Vegas, Pittsburgh, and Orlando, Fla., among others.

    Comcast is also downplaying the sheer size of the deal, pointing out that the combined company will have a 13 percent share of total advertising and affiliate revenues -- still behind Disney/ABC, Time Warner Inc. (NYSE: TWX), and Viacom Inc. (NYSE: VIA), and roughly the same size as News Corp. (NYSE: NWS)'s video content assets.

    And, perhaps with the aim of keeping conditions on the deal at a minimum, Comcast added that the proposed merger with NBCU isn't among the top five telecom/media deals reviewed by the government. As a recap, the top five such combos are: AOL/Time Warner ($165 billion); AT&T/Bell South ($67 billion); SBC/Ameritech ($62 billion); AT&T/MediaOne ($58 billion); and Bell Atlantic/GTE ($53 billion).

    — Jeff Baumgartner, Site Editor, Light Reading Cable

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