Comcast-NBCU Topic A: Online Video


Washington — It’s looking
increasingly likely that access
to online video will factor into
the Federal Communications
Commission’s decision-making
on Comcast’s $30 billion jointventure
deal for control of NBC

It was the focus of much of the
agency’s attention last week at an
FCC field hearing on the deal in
Chicago, where network neutrality,
managed services and impeding
bits and bytes were a subtext
whenever they weren’t the main

FCC chairman Julius Genachowski
did not attend, but still
made the point about broadband
in a prerecorded opening
statement. He said that rapidly
evolving new media are an “increasingly
important part” of
the communications landscape,
and that the speedy deployment
of broadband is a goal and value
that will “inform our review.”

Comcast and NBCU have argued
that the post-deal company — a
Comcast-controlled joint venture
with current NBCU parent General
Electric — will hardly have a
corner on access to online video.
In any event, Internet-access and
program-access issues are “not
specific to the facts of this transaction,”
Comcast executive vice
president David Cohen argued
in a recent blog post, pointing out
that the FCC has said such issues
are better dealt with in a general

There was some support for Cohen’s
viewpoint in Chicago. But
deal critics, lined up by the FCC
in numbers too big to ignore, saw
things differently.

Among them was Democratic
commissioner Michael Copps,
the only current FCC member in
attendance, who said that hearing
was the appropriate time and
place to bring online content into
the conversation.

“I cannot, I will not, accept
half-hearted pledges of fairness
from industry when the future of
the Web is at stake,” Copps said
in his opening statement. Then he
came close to weighing in on the
merger presently before him.

“[R]ight now, the assurances and
conditions we have received on
this Comcast-NBCU proposal don’t
pass the red-face test,” said Copps.
“How many times do we have to
experience the fallout when critical
decisions are entrusted only to
those in industry without credible
public-policy oversight?”

Calling for online access or
network-neutrality conditions
at the Chicago event were a
host of familiar faces from the
pro-network neutrality side of
the online-regulation debate.
They included Josh Silver of Free
Press; Susan Crawford, former
White House technology adviser
and a network-neutrality advocate;
and Markham Erickson of
the Open Internet Coalition. Erickson
has been participating in
high-level FCC meetings about
possible legislative responses to
the recent court ruling stating
that the agency overreached in
sanctioning Comcast for its management
of BitTorrent traffic on
its network.

Online will eventually be the
main delivery means for video,
argued Erickson, who said it will
eventually dominate consumer
behavior. He pointed to cable
subscribers cutting the cord in favor
of online video.

One of the keys to whether
Comcast would have the incentive
to restrict access to online
content in an anticompetitive
fashion is whether online video
consumption is seen as a complement
to traditional video, or
as a substitute.

If it is complementary, the
argument goes, there is less
incentive to restrict access. Susan
Whiting, vice chairman of
Nielsen, suggested Web video
is complementary, pointing out
that TV viewing is at record levels
and climbing even as online
video grows in popularity.

Crawford, the former White
House aide, argued there is a generational
split and that the under-
30 crowd is cutting the cord.

Dish Network senior vice president
and general counsel Jeff
Bloom joined in the chorus of voices
for online-access conditions,
saying that Comcast-NBCU would
have the incentive to discriminate
against the satellite-TV firm’s competing
online video offerings.

The hearing came against a
backdrop of continued meetings
at the FCC between Edward Lazarus,
Genachowski’s chief of staff ,
and industry representatives over
possible congressional fixes to
FCC broadband authority.

Key developments in the Comcast-NBCU deal:

Deal points: Comcast and GE are forming a content joint venture,
51% owned by Comcast, with the MSO expected eventually to
own it all. GE contributes interest in NBC Universal, valued at
$30 billion. Comcast contributes cable channels, regional sports
networks and Internet assets Fandango and Daily Candy, valued at
$7.25 billion, and pays GE approximately $6.5 billion.

Dec. 3, 2009: Deal is announced.

Jan. 6: Justice confirms it is looking at deal.

Feb. 4: House and Senate committees hold first hearings.

March 18: FCC begins review.

July 14: European Commission approves merger.

End game: Justice is looking at November to wrap up, a source
reports; FCC has been aiming for year-end, though that could
bleed over to Q1 of 2011.

Multichannel News research


WASHINGTON — Look for a voluminous filing this week from
Comcast responding to the litany of concerns expressed by
commenters to the Federal Communications Commission on its
proposed NBC Universal joint venture.

July 21 is the deadline for replies stating why the FCC should
or should not approve the deal, and under what conditions.

Comcast’s response will likely highlight steps the nation’s
top cable operator has already taken to answer some of
the criticisms levied about program diversity and access for
independent producers. Its most recent response to that
criticism was a deal last week with the Independent Television &
Film Alliance.

IFTA president Jean Prewitt said that the group, which had
been critical of the transaction, does not oppose the deal.
Comcast and NBCU pledged to take pitch meetings, keep
independents in the loop on development needs and potential
film acquisitions and provide $6 million in development dollars
for independent cable and network productions.