Comcast Corp's NBC Universal deal faces a long and intense regulatory review that could end in approval only after the cable giant agrees to give rivals access to NBCU's television shows and movies, experts said on Thursday.
The U.S. government's concern will likely focus on ensuring that Comcast's cable and satellite competitors, like Verizon Communications Inc and DISH Network Corp , have access to NBC Universal's programs for their subscribers.
Herb Kohl, a Democrat who chairs the Senate's antitrust and competition policy subcommittee, called on regulators to ensure that all content providers are treated fairly on the Comcast platform.
Kohl said he will hold a hearing to look at how the Comcast deal could affect consumers' access to diverse programing, especially on the Internet.
It's critical that we preserve robust competition and promote innovative and emerging program delivery in this rapidly changing market, he said in a statement.
Comcast and General Electric Co unveiled their NBC Universal deal on Thursday, planning to set up a joint venture that is 51 percent owned by Comcast and 49 percent by GE. The deal would give Comcast, the top U.S. cable service provider, control of a major media conglomerate.
Antitrust experts said it could take the U.S. Federal Communications Commission, which reviews broadcast license transfer applications, and Justice Department or Federal Trade Commission, which share the job of antitrust regulation, a year to work out conditions for approval, but they expected the deal to finally get the green light.
I think it will get to closing. I don't think anybody's going to stop the deal, said antitrust expert John Briggs of the law firm Axinn Veltrop Harkrider LLP.
Public interest groups, nonetheless, have urged the Obama administration to keep its commitment to reinvigorate U.S. antitrust laws by making sure the proposed deal doesn't see the light of day.
They fear that Comcast might charge other cable distributors higher fees to transmit NBC Universal-owned content, leading to higher cable bills. They also fear other media M&A deals could result in less competition.
There are no indications that this merger could be good for the public in any way, Free Press policy director Ben Scott said in a statement. It will lead to higher cable bills, fewer independent programing choices, and less competition. The only party standing to benefit here is Comcast -- at the expense of the public.
CONSUMER GROUPS REACT
Consumers Union, which publishes Consumer Reports, had a similar concern. The federal government should approach this merger with deep skepticism, said Consumers Union policy analyst Joel Kelsey.
They have a point, said Evan Stewart, an antitrust expert with Zuckerman Spaeder LLP, who expected the deal to be approved.
I imagine that the bigger issue is the cable industry rather than the content industry, he said. I'm referring to Comcast not having any price constraints.
John Kerry, who chairs the Senate subcommittee on communications, technology and Internet, said his panel will make sure that legitimate anti-competitive and public interest concerns are fully addressed.
To head off anticipated concerns and criticisms, Comcast Executive Vice President David Cohen offered voluntary public interest commitments.
Those included expanding children's and diverse programing and continuing free over-the-air television through the broadcast networks of NBC and Spanish-language Telemundo.
But the expectation was that regulators would step in to rein in Comcast.
They've got a lot of ways to play with all these assets so the question is, 'How can they screw their competitors?' said Briggs. That's their job, after all.
FCC Chairman Julius Genachowski's spokeswoman, Jen Howard, said: The FCC will carefully examine the proposed merger and will be thorough, fair, and fact-based in its review.
The Justice Department's antitrust chief, Christine Varney, is keeping quiet. We're not commenting, she said.
FTC Chairman Jon Leibowitz also declined to comment. The Justice Department and FTC share the job of enforcing antitrust law.
(Reporting by John Poirier and Diane Bartz; Editing by Richard Chang)