FCC Approves Comcast/NBCU Deal
By: John Eggerton, Broadcasting & Cable
The FCC commissioners voted Tuesday to give the green light to Comcast to team up with NBC Universal in a $30 billion joint venture, according to two sources close to the commissioners.
The vote was 4-1, with Commissioner Copps voting against it, providing a ringing dissent. A veteran media consolidation critic, Copps had all along said its approval was a very steep Hill for him, and ultimately it proved too high for him to climb.
Justice was expected to follow the FCC almost immediately with the word it was not going to block the deal. The FCC was reviewing the deal for its impact on public interest, while Justice focuses on competition issues.
The FCC commissioners had been vetting a draft approval circulated last month, and made some edits, but sources say the draft is essentially the same. Comcast has signaled it could live with the conditions the FCC proposed.
The deal comes with plenty of those conditions, including on access to broadcast, cable, and online content, and network neutrality conditions. The network neutrality condition will be an "enforceable commitment" even if the rules are thrown out by the courts, according to a source.
The deal also comes not quite a year since the two companies officially filed the joint venture request with the FCC Jan. 28, 2010.
The deal, which FCC officials have stressed was a joint venture rather than a merger, combines the nation's largest cable operator with a studio library and cable channel content. It creates a company majority owned by Comcast (51%) that pools all of NBCU's media content with most of Comcast's, with Comcast retaining full control of its cable and Internet assets. Comcast has the option of buying out NBCU parent GE's 49% interest in the joint venture over the next three to seven years.
The FCC's review stemmed primarily from the transfer of NBCU's broadcast licenses, and Comcast/NBCU had the burden of proving that the venture served the public interest, which is the FCC's standard of review, and includes competition, innovation, localism and diversity. If the augmented benefits (say Comcast's public interest pledges) and mitigated harms (conditions on access to content) tip the scale toward the public interest, the deal is approved.
FCC Chairman Julius Genachowski and the transaction team signaled last month the deal, with conditions, tipped the balance in favor of the public interest.
Deal critics have disagreed, but even most of them conceded the deal was going through.
An FCC source says Comcast also late Monday filed in the merger review docket officially agreeing to commit to the network neutrality conditions voluntarily even if the FCC's network neutrality rules approved Dec. 21, are eventually thrown out by the courts.
It was being described as an enforceable voluntary commitment, rather than a condition, which might be an effort to appease commission Republicans.