Comcast/NBCU: No Basis For Online Conditions

Online access conditions still expected in FCC decision on deal

By John Eggerton -- Broadcasting & Cable, 12/16/2010 9:24:57 AM

If there were any doubt the FCC is considering putting online conditions on the Comcast/NBCU merger--and there really wasn't--Comcast said as much in an exparte filing posted Thursday in the FCC docket on the proposed joint venture.

Comcast execs met with FCC and Justice Department officials this week about online content and the impact of conditions in that space.

In meetings with a top aide to FCC Chairman Julius Genachowski and John Flynn, the chairman's transactions advisory, Comcast EVP David Cohen and NBC General Counsel Rick Cotton discussed the potential of the online access conditions the filing says are "currently under consideration by the Commission in this proceeding," and warned of their harmful unintended consequences."

They echoed that sentiment in meetings with the antitrust division of the Justice Department that was also attended by Flynn and FCC Media Bureau Chief Bill Lake. Among the topics of that discussion, according to another ex parte filing with the FCC, were "distribution of online video, program access, Hulu, open Internet, and arbitration."

Comcast has said that it should be as free to develop new and competitive online delivery models as its competitors, of which it argues there are many.

"[T]here is no basis in the factual, legal, or economic record for conditions in these areas," the executives told officials from both agencies.

That protestation notwithstanding, sources inside and outside the FCC, including present and former top officials, expect some kind of online access conditions as well as outside arbitration. Access conditions and arbitration for linear sports programming, like Comcast's regional sports nets, are widely expected to be applied, as they have been in previous deals, including Cocmast's purchase of Adelphia cable systems. But they key issue now is what kind of online conditions, if any, the FCC will impose, and how limiting Comcast or NBCU feel they could be.

The FCC is expected to issue a decision early next year. Though it is still possible the chairman could circulate a draft before the end of the year, various sources close to multiple commissioners have indicated that since they had still not seen any draft of a decision, a decision before the end of the year is highly unlikely. One source said an end-of-the-year time frame for a final decision would have needed to produce a draft by sometime in November to provide the requisite time for review.