FTC Probes NBC Deal

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Before NBC gets to take control of Vivendi Entertainment, the Federal Trade Commission will investigate complaints from Hollywood's creative community, which warns that the pending deal will diminish competition in show biz even more than it already is.

Jonathan Rintels, executive director of the Center for the Creative Community, says FTC staffers seem "interested in the issue and have been calling people to research these issues further."

A source following the deal said Rintels and Leonard Hill, who chairs the government affairs committee of the Caucus for Television Producers, Writers and Directors, met with FTC staff to explain concerns that NBC's acquisition of Vivendi's Universal Studios, will stifle opportunities for independent TV producers.

The creative types want the FTC to require that NBC make a portion of its prime time lineup available to shows produced outside its own in-house studios. Such a requirement would, for NBC at least, reverse the government's elimination of restrictions on in-house programming in the 1990s.

Rintels confirmed that he has met with FTC staff, but caucus officials did not return a phoned request to confirm Hill's meeting by deadline.

The caucus, however, has made public his Nov. 10 letter to FTC Chairman Timothy Muris urging that the FTC impose conditions before it approves the deal. "The ability to provide diverse, quality television and to control and own the copyright in the programs they create and produce has been diminished by the horizontal and vertical integration in the entertainment industry," wrote Hill and caucus Chairman Charles Fries.

Rintels said it was unclear from his discussions with FTC staff whether such a condition or any other was likely.

NBC Chairman Robert Wright said last week that he expects FTC approval by the end of the first quarter.

The FCC is not required to sign off on the deal but last month did approve NBC's plan to consolidate 23 subsidiaries holding its broadcast licenses into one NBC Telemundo License Co. That consolidation is happening concurrent with completion of the Vivendi deal.

That the FTC is examining NBC's takeover is by itself a small victory for the creative community and their allied public-interest watchdogs. The FTC nearly lost its right to examine any media mergers last year when the Attorney General John Ashcroft and Muris agreed to designate all media antitrust investigations as Justice Department territory. Members of the public-interest community and other FTC commissioners defeated the idea. A source following the deal said Rintels and Leonard Hill, who chairs the government affairs committee of the Caucus for Television Producers, Writers and Directors, met with FTC staff to explain concerns that NBC's acquisition of Vivendi's Universal Studios, will stifle opportunities for independent TV producers.

Commission staffers have followed up complaints from producers, writers, directors and actors with requests for additional information.

The creative types want the FTC to require that NBC make a portion of its prime time lineup available to shows produced outside its own in-house studios. Such a requirement would, for NBC at least, reverse the government's elimination of restrictions on in-house programming in the 1990s.

Rintels confirmed that he has met with FTC staff, but officials from the caucus did not respond to a request to confirm Hill's meeting.

The caucus, however, has made public his Nov. 10 letter to FTC Chairman Timothy Muris urging that the FTC impose conditions before it approves the deal. "The ability to provide diverse, quality television and to control and own the copyright in the programs they create and produce has been diminished by the horizontal and vertical integration in the entertainment industry," wrote Hill and caucus Chairman Charles Fries.

Rintels said it was unclear from his discussions with FTC staff whether such a condition or any other was likely.

NBC officials would not comment on specific issues being discussed but has acknowledged that it is the FTC that is conducting the required antitrust review, not the Justice Department, which also reviews media mergers.

NBC Chairman Robert Wright predicted last week that he expects FTC approval by the end of the first quarter.

The FCC is not required to sign off on the deal but last month did approve NBC's plan to consolidate 23 subsidiaries holding its broadcast licenses into one NBC Telemundo License Co. That consolidation is happening concurrent with completion of the Vivendi deal.

That the FTC is examining NBC's takeover is by itself a small victory for the creative community and their allied public-interest watchdogs. The FTC nearly lost its right to examine any media mergers last year when the Attorney General John Ashcroft and Muris agreed to designate all media antitrust investigations as Justice Department territory. Members of the public-interest community and other FTC commissioners defeated the idea.

The FTC is viewed by the public-interest community as a more impartial judge because, unlike the Justice Department, it isn't considered an arm of the White House or sympathetic to media companies as they say the FCC is.

The FTC, they note, imposed tough cable open-access conditions on Time Warner's 2001 merger with America Online and forced Time Warner to end contracts giving Tele-Communications Inc. favorable terms for programming contracts when it acquired Turner Broadcasting in 1996. "The FTC engages in honest reviews of these issues," said Jeff Chester, executive director of the Center for Digital Democracy.

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