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NBC-Vivendi Could Avoid FCC Review

The proposed merger between NBC and Vivendi Universal Entertainment -- a
potentially juicy target for foes of media concentration -- might be able to
close without review by the Federal Communications Commission.

If the final structure of the deal does not require the transfer of NBC's TV
licenses to the newly formed company, then no action from the FCC would be
necessary, sources said Tuesday.

The deal would likely require approval of either the Department of Justice or
the Federal Trade Commission. But those agencies do not conduct the same public
review as the FCC. FCC merger reviews typically draw hostile comments from
public-interest groups that seek media attention for their complaints.

The merger would give France-based Vivendi Universal 20% ownership of the
company. Federal law caps direct foreign ownership of a broadcast licensee at
20%, but indirect ownership (usually through a holding company) takes the cap to
25% percent, an FCC source said.

After closing, NBC would take control of three cable networks (USA Network,
Sci Fi Channel and Trio), giving the company partial or total ownership of 17
national cable networks.

The parent corporations of NBC, ABC, CBS and Fox would own, in whole or in
part, 66 national cable networks, according to a January 2003 FCC filing by Cox
Enterprises Inc.