WASHINGTON - The head of the Federal Communications Commission is proposing regulatory conditions to ensure that cable-TV giant Comcast Corp. cannot stifle competition in the video market once it takes over NBC Universal.
The conditions laid out Thursday by FCC Chairman Julius Genachowski are intended to guarantee that satellite providers and other rival television services can still carry marquee NBC programming and that new Internet-video distributors can get the content they need to grow and compete.
Comcast's takeover of NBC Universal could have profound consequences for the nascent market for Internet video, a market that could eat into Comcast's core cable-TV business if enough consumers drop their cable subscriptions in favor of low-cost alternatives online.
Genachowski wants to ensure that Comcast won't be able to use its control over NBC's vast media empire to withhold content from emerging online competitors such as Netflix Inc., Amazon.com Inc. and Apple Inc., locking consumers into costly monthly cable bills to get access to a wide range of popular programming.
He now needs at least two of the other four FCC commissioners to back his proposal, and is likely to make modifications to win the support he needs. The FCC is expected to approve the deal, with conditions, early next year.
The deal also faces scrutiny from the Justice Department, which has been working closely with the FCC and is likely to impose and enforce conditions similar to whatever the FCC ultimately approves.
Comcast is seeking government approval to buy a 51 percent stake in NBC Universal from General Electric Co. for $13.8 billion in cash and assets.
The combination would give the nation's largest cable-TV company control over the NBC and Telemundo broadcast networks, popular cable channels including CNBC, Bravo and Oxygen, and the Universal Pictures movie studio. It would also give Comcast a roughly 30 percent stake in Hulu.com, which has become a popular online platform for broadcast programming from NBC, ABC and Fox.
Although Comcast already owns a handful of cable channels, including E! Entertainment and the Golf Channel, it has built its business on distributing television programming and providing Internet connections. The company has about 23 million cable-TV subscribers and nearly 17 million Internet subscribers.
Taking over NBC Universal would transform Comcast into a media powerhouse, too. Genachowski's proposed conditions are intended to prevent the company from trampling competitors once it owns content as well as distribution platforms.
FCC officials wouldn't disclose details about the conditions Thursday because commissioners were still reviewing the proposal, but two people outside the FCC described the terms to the Associated Press. They had knowledge of the details but spoke on condition of anonymity because the discussions were confidential.
One measure aims to guarantee that satellite operators, phone companies and rival cable-TV services can still get access to NBC broadcast and cable channels, Comcast's regional sports networks and other must-have programming at reasonable prices.
Another condition would require Comcast to make NBC Universal programming available to Internet video distributors under certain circumstances. Imposing these obligations on Comcast would help prevent Comcast from stunting the growth of Internet video.
Yet another measure would bar Comcast from pressuring independent programmers into restricting online distribution of their content in order to get a spot on the cable systems.
In addition, Genachowski's proposal would prohibit Comcast from requiring consumers to subscribe to cable in order to get online access to certain NBC Universal content, including NBC broadcast programming.
The proposal would also require Comcast to continue offering an affordable, stand-alone broadband option for customers who want Internet access but not cable. This condition, too, could help drive the growth of online video by allowing consumers to cancel their cable subscriptions without losing their Internet connections.
by Joelle Tessler Associated Press Dec. 23, 2010 05:29 PM
FCC may regulate NBC takeover
