The countdown to what Comcast calls a new, content-focused, more independent and decentralized NBC Universal began last week with official filings with the Federal Communications Commission and the Justice Department.
In its public-interest filing with the FCC (the DOJ filing is confidential), Comcast and company (NBCU and parent General Electric) did not offer up any new voluntary conditions beyond those outlined when the deal was first announced Dec. 3.
The filing did expand and quantify many of those proposals as part of an overall pitch that paints the deal as a vertical combination that would further the commission's touchstone goals of localism, diversity, competition and innovation.
While Justice will review the deal strictly on antitrust grounds, the FCC goes beyond competition to look at the public-interest impact — hence the lengthy, 136-page filing accompanying the request for transfer of various cable and broadcast licenses. The $30 billion merger also will be scrutinized on Capitol Hill in hearings that start Feb. 4. Deal critics are already weighing in.
“Comcast's reputation for customer service ranks about one rung above Enron and Blackwater,” Free Press executive director Josh Silver said. “The idea that it is magically going to be consumer friendly after it gets bigger doesn't pass the laugh test.” Free Press was an early and vocal critic of the deal, suggesting there would likely be no conditions under which it thought it should pass muster.
American Cable Association president Matt Polka said: “Because Comcast and NBCU drafted these public-interest commitments on their own, it shouldn't shock anyone that they are totally porous and inadequate.”
Senate Judiciary Committee chairman John Conyers (D-Mich.), who will hold hearings on the deal next month, was more even-handed.
“It is clear to me that any merger of this magnitude should be reviewed carefully,” Conyers said in a statement. “Nonetheless, Comcast's commitment to diverse programming and maintaining the journalistic independence of NBCU is encouraging. I am also glad to see that Comcast has committed to maintaining local affiliates, local news coverage and other public-interest programming.”
Conyers also suggested he'd like to see even more voluntary commitments, including on access to sports programming, independent content and shows via the Internet “for minimal or no cost.”
Comcast and company said the FCC shouldn't even be getting into the Internet side of the deal, arguing that it poses “no threat to online competition,” citing both companies' relatively small share of total online video viewing and saying it was a nascent and competitive market the FCC shouldn't be getting into anyway.
Public Knowledge legal director Harold Feld, a critic of the proposed deal, said: “We are incredulous that Comcast and NBCU would downplay Internet distribution of video at a time when the FCC has repeatedly identified online video as one of the primary drivers to broadband adoption.”
Public Knowledge argues that online competition should be part of the review, with conditions insuring nondiscriminatory access to online as well as traditional programming distribution.
The public-interest document lays out the benefits in terms of the FCC's four key interests: localism, diversity, competition and innovation.
It argues the deal promotes the first by increasing the quality and variety of content more than either company could do alone. With its commitment to boost locally produced news programming by 1,000 hours on the O&O stations and other platforms, as well as increase children's and family programming and more, Comcast argues that it is promoting localism.
The deal will spur the competition to up its game, which takes care of No. 3, they argue, and the new company will experiment with new business models and distribution platforms that will spur innovation.
Comcast restated its pledge to keep the broadcast networks and stations as going concerns, although with ongoing conversations about what that may entail. “Comcast will continue its cooperative dialogue with its affiliates toward a business model to sustain free over-the-air service that can be workable in the evolving economic and technological environment,” the filing said.
The document also argues that the transaction violates no FCC rules and is not even the sort of media concentration the agency is traditionally concerned about regulating through market or cross-ownership limits.
Among the public-interest pledges outlined Thursday were a commitment to the same amount of local news and information programming on NBC owned-and-operated stations for three years after the merger is approved — “a particularly significant commitment to promote localism given the economic challenges facing all broadcasters today.”
The 10 NBC O&Os will commit to producing a collective 1,000 additional hours of content on various platforms, including Comcast regional networks, VOD, online and multicast channels.
The new company promises to add thousands of new on-demand offerings aimed at “children and families,” and will adopt the cable standards for on-screen ratings, boosting the duration of onscreen ratings information from five to 15 seconds after each commercial break. That goes directly to a major FCC priority: Improving the V-chip ratings system as part of a wider effort to boost and simplify parental content-control options.
Comcast and NBCU pledge to expand their relationship with Common Sense Media — FCC Chairman Julius Genachowski is a founding board member — to include more extensive programming information and content-control tools.
Echoing a settlement of a complaint by several Michigan communities, Comcast pledged not to move any public, educational or government access channels to a digital tier until the system goes all-digital or a community agrees to the move.
The review is expected to take nearly to a year, but Comcast chairman and CEO Brian Roberts is hoping it will be sooner.
“[I]n a creative endeavor … you don't want 30,000 people on hold too long,” he said last week. “However expeditiously that review can occur is very important to the company.”
THE REVIEW BEGINS
Comcast has presented its proposed acquisition of 51% of NBC Universal's programming assets to the federal government for review and approval. Key players in that endeavor and some key questions looming over the review:
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