Comcast/NBCU: No Basis For Online Conditions

Online access conditions still expected in FCC decision on deal
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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.

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