Proceed With Caution

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Comcast and NBCU haven't even announced a deal yet, and the handicapping has begun. The two are expected to announce the creation of a combined company within days, a marriage of the largest cable operator in the U.S. with one of the largest content creators could actually help the industry. Last week, MCN's Cover Story offered readers “Three Reasons Cable Should Cheer the Comcast NBCU marriage.”

I'd offer a parallel view of the deal: three issues where Comcast and NBCU could hurt cable if they misstep in the crucial weeks ahead.

1. Regulators could yank cable's chain. The Obama administration, which campaigned on media diversity and closer review of merger bids, will certainly ask for concessions, and a proactive approach by Comcast would make it easier.

Much of the FCC's inquiry will focus on carriage agreements given the sheer volume of content Comcast would control. And Comcast, a Hulu competitor, would suddenly become an owner of that dominant video-sharing site. How online video is treated will be very critical to the FCC's analysis. This could stretch into a net neutrality debate, which is very, very complicated, with negative implications for cable operators.

Because the merger touches on issues central to the FCC — net neutrality, retransmission consent, localism, etc. — it's not unreasonable to think the agency could create an entirely new architecture for regulation on a bigger scale, for everyone.

2. Customers — and comrades — could turn quickly if they're overcharged. Comcast has never been afraid to raise rates, and the FCC, local governments, subscribers and innumerable Web sites will be paying close attention to rates if and when a marriage occurs. Likewise, fellow cable operators won't take kindly to broad price hikes in NBC's retransmission-consent agreements, which could spark price inflation for everyone.

3. A culture clash could slow innovation. As Time Warner's recent unspooling of its cable and AOL units shows, sometimes deal synergies just don't materialize and they're costly to unwind. Don't let Philly take over Hollywood, and vice versa. Brian Roberts is a man comfortable in his own skin and Steve Burke is as smooth as butter. Neither is likely to be seduced by the bright lights of L.A., and they won't likely impose the button-down culture of Comcast. Still, there's a real risk here that executives and businesses don't mesh. That could slow down — not accelerate — cable TV's biggest initiatives.

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