Comcast/NBCU Dispute Need For Online Conditions

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Amid growing attention on the issue of access to online content, Comcast and NBC Universal execs met this week with Federal Communications Commission chief of staff Edward Lazarus, Media Bureau chief Bill Lake and other top officials to argue against applying any online distribution conditions to their proposed joint venture.

The FCC has been collecting string on the issue throughout its vetting of the deal, including following up with Hulu execs on several occasions, but the issue has heated up in recent weeks, propelled in part by the Fox/Cablevision retrans ruckus.

According to an ex parte filing with the FCC, Kathy Zachem, vice president of regulatory and state legislative affairs at Comcast and NBCU executive vice president and general counsel Rick Cotton were in the meeting to "dispute the need for any conditions in [the] proceeding related to the online distribution of video programming."

Comcast argued, as it has before, that online and traditional video delivery are complementary, saying "there is no reason to expect this to change in the foreseeable future." Comcast pegs NBCU's post-transaction share of online content at 15%, which it calls a "very modest" amount.

"[T]here is no economic evidence or analysis in the record supporting a theory of anticompetitive effects in the online video marketplace or the need for any online video remedies," the execs said.

They also argued that there were "substantial risks" to trying to apply program access or arbitration procedures to online video.

Deal critics have used the Fox/Cablevision retrans impasse to draw more attention to the online side of the deal. That came after Fox briefly blocked Cablevison sub access to its content on Fox.com and Hulu, though not brief enough to escape the notice of public-interest groups, which hammered Fox over the move.

"Fox's decision to cut off access to its online programming to Cablevision subscribers shows that "the current generation of dominant content and content delivery networks are trying to control the next," Public Knowledge told the FCC.

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