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Comcast’s Biggest Regulatory Win? What The FCC And DOJ Didn’t Do

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Sure, there are plenty of conditions attached to the regulatory approval of Comcast’s buying 51 percent of NBC Universal (NYSE: GE), including losing a say in Hulu, Some will govern many of the merged company’s actions for as long as seven years. But none of them are the kind of showstoppers opponents of the deal like U.S. Sen. Al Franken demanded — and that’s a different kind of victory for Comcast (NSDQ: CMCSA). Comcast EVP David Cohen, responsible for pushing the deal through DC, claims eight specific wins in the agreements with the Department of Justice and Federal Communications Commission:

— No divestitures;

— No substantive changes to the program access rules (including changes to bundling and volume discount rules);

— No extension of program access rules to the online space;

— No substantive changes to the program carriage rules (and no arbitration requirement);

— No general “neighborhooding” requirement (although we have accepted a condition that if we neighborhood news channels, we won’t discriminate against non-owned news channels);

— No wholesale high-speed data remedy;

— No structural separation between Comcast and NBC Universal; and

— No programming or cable channel quotas.

All of the conditions, including the efforts to protect online video distributors, are nestled within today’s competitive industry framework. What already exists, for the most part, continues, even for Comcast as long as it plays with the rules. And, as Law professor Susan Crawford, a former FCC adviser, expains, many of the rules are hard to enforce.

Comcast doesn’t have to choose between Steve Burke as CEO Brian Roberts’ second-in-command and head of NBCU. It doesn’t have to sell its 32 percent stake in Hulu. It doesn’t have to put Bloomberg next to CNBC despite the competitor’s “win” in so-called neghborhooding (the way channels are grouped in cable electronic programming guides) unless it changes the circumstances. It doesn’t have to offer channels a la carte, something a Kevin Martin-led FCC likely would have pushed hard.

And, in what may turn out to be one of the most important wins for Comcast the cable operator, neither the FCC or DOJ used this as a chance to automatically extend programming access requirements to online video distributors (OVDs). They also left Hulu and Comcast’s Xfinity exempt from matching access requirements.

The result: as BTIG analyst Richard Greenfield puts it in today’s note (sub. req.), “unless ABC (NYSE: DIS), CBS (NYSE: CBS) or FOX do very bad things, the FCC/DOJ NBCU OVD conditions are meaningless.”