Thursday, January 13, 2011

NBC Universal/Comcast Merger Closer To Approval By FCC

Article first published as NBC Universal/Comcast Merger Closer To Approval By FCC on Technorati.

I'm including my blog, below, from Technorati about media mergers.

Comcast Corp. is one step closer to acquiring NBC Universal after FCC Chairman Julius Genachowski gives conditional backing. The biggest concern by federal regulators is the perception of a fair market amongst media content providers and content distribution. This has rival media companies voicing concern over the conditions.

In 2009, Comcast reached a deal with NBC Universal to purchase the media company for nearly $14 billion in cash and assets. Since then, both the FCC and the U.S. Justice Department have been reviewing the proposed deal.

The Justice Department has been scrutinizing the deal and supporting documents for possible anti-trust violations. While the FCC, under Genachowski’s direction, has been providing a list of conditions required for FCC approval that delve mainly into ensuring that Comcast does not unfairly restrict other programming providers access to NBC content.

An additional FCC condition concerns Comcast abide by the concept of “Net Neutrality” in that is does not restrict NBC competitor’s access to their Internet network. This would mean that they could neither prohibit the competitors, nor prioritize their own content over their competitors. These conditions would have to be adhered to for a minimum of 7 years for approval.

Competing media companies are expressing concern over these restrictions. Representatives for Time Warner, Disney, and News Corp have lobbied the FCC suggesting that these rules may restrict their ability to conduct business in the online video distribution industry and may impact current negotiations with establish on-line providers.

Though some critics point out this may be a positive for consumers as this might lessen the content distributors’ control of how the market might evolve. 

This blogger has concerns about this, in general. My first reason is these synergistic coupling never benefit the consumer. With less competition, quality of content drops and prices rise. Consumers have never benefited from deals like this.

My second concern is from the business side. If you recall the great and mighty merger of Time Warner and AOL and how it was going to be the greatest thing for the industry as well as stock-holders and how that situation failed miserably. Time Warner quietly continues to shed AOL as it was a major money sink. The industry didn't grow many new jobs, either.

At least this means the company can't send all of it's jobs overseas. I mean, you will need people here to hook the cable up.