FCC, DOJ Approve Comcast-NBCU Merger

WASHINGTON, D.C.: The Federal Communications Commission, in a 4-1 vote, today gave the greenlight to the proposed combination of Comcast and NBC Universal, with the deal likely to close by the end of the month.

“This is a proud and exciting day for Comcast,” said Brian L. Rocberts, hairman and CEO of Comcast. “The NBC Universal joint venture will be well positioned to compete, innovate, and bring new choices to consumers. Our original vision for the combination remains intact so that consumers will benefit, and our competitors will be treated fairly. We are pleased that many of the voluntary commitments we proposed beginning the day the transaction was announced and continuing throughout the process have been incorporated into the FCC’s Order.”

Jeff Immelt, chairman and CEO of GE, added, “NBCU has been a great business for GE over the past 20 years, generating an average annual return of 11 percent. Reducing our ownership stake from 80 percent to 49 percent allows GE to continue sharing in NBCU’s growth while also providing significant cash to invest in our high-technology infrastructure businesses, growing an attractive dividend, and continuing our buyback program. This transaction will have generated approximately $8 billion of cash at closing with an expected small after-tax gain. We are confident the NBCU team will continue to be in good hands under Brian Roberts, Steve Burke and the Comcast team’s leadership.”

Steve Burke, who will become CEO of NBC Universal at the official close of the transaction, noted, “Bringing the legendary assets of NBC Universal together with the content assets and technology expertise of Comcast will create many new opportunities for consumers. The combination of these assets will allow us to bring the future of anytime, anywhere media faster to consumers in America and around the globe.

 

 

 

 

The sole dissenting vote from the FCC came from Commissioner Michael J. Copps, who said in a statement that the merged entity "reaches into virtually every corner of our media and digital landscapes and will affect every citizen in the land. All the majority’s efforts—diligent though they were—to ameliorate these harms cannot mask the truth that this Comcast-NBCU joint venture grievously fails the public interest."

 

 

The Department of Justice is also allowing the JV to proceed. It released a statement today laying out the conditions of the merger, which are intended to "preserve new content distribution models that offer more products and greater innovation, and the potential to provide consumers access to their favorite programming on a variety of devices in a wide selection of packages."

 

 

The DOJ noted that the FCC has already mandated that the JV license NBC Universal content to Comcast’s cable, satellite and telephone competitors. The DOJ conditions include that the JV make available to online video distributors (OVD) such as Hulu the same package of broadcast and cable channels that it sells to traditional video programming distributors. Plus, it must offer an OVD broadcast, cable and film content that is similar to, or better than, the content the distributor receives from other networks or studios.

 

 

In the event of a licensing dispute, the OVD can pursue a commercial arbitration procedure. The FCC order also allows Comcast’s traditional pay-TV competitors to invoke arbitration at the FCC over program access and retransmission consent disputes.

 

 

Other conditions stipulated by the DOJ include that Comcast cannot retaliate against a network, cable channel, studio or distributor for selling content to a competing platform. Comcast must relinquish a management role in Hulu. "Without such a remedy, Comcast could, through its seats on Hulu’s board of directors, interfere with the management of Hulu, and, in particular, the development of products that compete with Comcast’s video service. Comcast also must continue to make NBCU content available to Hulu that is comparable to the programming Hulu obtains from Disney and News Corp.," the DOJ stated. Plus, Comcast is prohibited from "unreasonably discriminating" in the transmission an online video outfit’s traffic to a Comcast Internet customer.