Editorial: Yep, They CanLive With It

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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 Comcast programming 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.

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