Comcast/NBCU: D.C. Hurdles, But No Roadblocks

With Comcast and GE said to be in talk to to join forces in a new company pooling GE’s NBC Universal assets and controlled (51%) by Comcast, a long-form review of the deal would have to take place at the FCC.

The FCC must approve any transfer of TV licenses, as well as an antitrust review at the Justice Department.

There are no FCC regulatory roadblocks to such a deal–the FCC repealed its rules preventing co-ownership of cable systems and TV stations back in the late 1990s. However, there could be hurdles to the combination of a studio and top cable operator from a Democratic administration that has vowed more merger scrutiny.

Comcast is the country’s largest cable operator with over 24 millions subs, according to Kagan figures from March.

A number of industry vets said that the FCC would likely put some conditions on the merger of a studio and MSO–as there were when News Corp. bought DirecTV–to make sure independent programmers were not disadvantaged by the vertical integration of studio and distributor.

Stations in markets where Comcast has cable systems and TV stations might ask for conditions barring discrimination in carriage terms in retrans negotiations, said one veteran communications attorney.

The companies could also get out in front of that process by coming to the FCC with their own proposals of conditions.

Another tack might be to spin off the stations or even the cable networks. Time Warner has gotten props in Washington for its arm’s length separation from its cable operations.