Editorial: Yep, They Can Live With It1/24/2011 12:01:00 AM Eastern
According to the FCC shot clock, the commission completed its Comcast/NBCU merger review in 234 days. Given that the FCC stopped the clock
during the review, it was almost a year between the Jan. 28, 2010
filing of the request for station license transfers and the approval.
Given some past merger reviews, that wasn’t bad.
Neither was the resulting order approving the deal,
with the caveat that the process becomes a chance to
pile on conditions—or, regulation by coercion, as the
Republican commissioners put it.
But, with that caveat, the FCC was apparently
not looking to handcuff or hobble Comcast just because
it was a big company getting bigger. The FCC
took the opportunity to
encourage/extract lots of
conditions, but that was
in part to assuage some of
the concerns of deal critics
and address the thousands
of comments it received.
The fact that Comcast
could live with all those
conditions from a policy as
well as a cost standpoint—
and that even some deal
critics were not complaining—
suggests that the
FCC was tough, but not
draconian. None of the
promises, though they involve
spending millions of
dollars on various programs, will have an impact on
the financials, Comcast indicated last week.
As expected, the government is requiring Comcast
to make its cable and broadcast programming
available to competitors at reasonable rates and
terms, and not to favor its own programming, but
Comcast can live with that.
Where the FCC and Justice were looking to put
down a stake was access to online video. They did,
but it was in the ground, rather than through the
heart of Comcast’s business model. Comcast must
make its content available to companies trying to
replicate the MVPD model online, but are allowed
to command the same price for that online bundle
as it commands from traditional cable operators, including
retrans fees for NBC owned stations, affiliate
fees and maybe even compensation for the fact that
online advertising is far cheaper than on-air.
Those seeking access to individual channels or
programs will fi rst have to get programming from
a Comcast competitor—establishing a benchmark,
as it were—before coming to Comcast/NBCU, and
even then the company does not have to make that
programming available unless it is comparable programming
and a comparable business model. For
example, an online video distributor (OVD) that got
music video programming
from Viacom would not
be able to assert a right to
scripted dramas from USA
Network or sports from
Versus, and if it did try, it
would likely have to make
its case to an arbitrator.
And if an OVD got access
to Turner programming on
an electronic buy-through
basis, it could not get similar
for VOD or streaming.
So, while the FCC is setting
up a system that anticipates
a time when online
and traditional video delivery
are on more equal footing, or online moves into
the lead, there are now enough caveats and hoops to
allow Comcast/NBCU to grow and innovate, say the
companies, which ought to know, even if they were
also not looking to criticize the regulators who approved
the deal and will be enforcing the conditions.
And while Comcast was not about to bite the hand
that fed it, we see nothing wrong with House members
using their oversight authority to look into the
process of merger reviews to determine whether the
public interest wish lists that get attached, or the regulatory
“coercion” those Republican commissioners
were talking about, are the appropriate government
fee for getting a corporate marriage license.
Merger reviews are still like pulling teeth, with
enough lengthy and complicated documents to
obviate the need for sedation dentistry. But, in the
end, the patient was smiling.