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As expected, the Federal Communications Commission today approved the merger between Comcast (NSDQ: CMCSA) and NBC Universal (NYSE: GE) 4-1, with Democrat Michael Copps as the lone naysayer. The Department of Justice quickly followed
is expected to quickly follow with its recommendations, paving the way for Comcast and GE to close the $13.75 billion deal that gives the cable operator control over NBCU on Jan. 28. The feds’ approval comes with its own price tag in the form of conditions that will control some of the new entity’s actions through much of this decade.
The FCC’s conditions include a host of public good commitments from taking “affirmative steps to foster competition in the video marketplace” to expanding local news, children’s programming, increase programming diversity for Spanish-speakers, etc. That’s the relatively small stuff, important to various factions and good for consuktants but nothing that really changes business.
Then there are the items meant to address “potential harms posed by the combination of Comcast, the nation’s largest cable operator and Internet service provider, and NBCU, which owns and develops some of the most valuable television and film content.” These have a shelf life of seven years:
— Ensuring reasonable access to the new entity’s programming for other competing distributors. That includes agreeing to am “improved commercial arbitration process for resolving disputes about prices, terms, and conditions for licensing Comcast-NBCU’s video programming.” That will be expanded beyond broadcast and regional sports to its cable channels.
— Protecting the development of online competition by setting conditions mean to protect “bona fide” online distributors in “appropriate circumstances.” (I can’t wait for those arguments.) Among other provisions, this includes economically comparable prices, terms, and conditions for online video distributors, known as OVDs in FCC jargon, at the same terms and conditions as cable, satellite and telecom; offering standalone broadband access “at reasonable prices and of sufficient bandwidth” to provide consumer access without a Comcast cable subscription; doesn’t “disadvantage” rivals through its ISP or set-tops.
There’s also something I’ll call the “Fox” clause: it can’t “exercise corporate control over or unreasonably withhold programming from Hulu.” Fox did just that briefly during its recent battle with Cablevision.)
The FCC has posted the full details (pdf).
DOJ’s requirements: The DOJ’s approval is conditional on Comcast and NBCU agreeing to a proposed settlement to an antitrust suit filed today. The settlement goes farther than the FCCin some areas, including control of Hulu.