WASHINGTON - Cable giant Comcast and NBC Universal said on Thursday they would continue reporting news, keep broadcast television free and offer more children's programming if the U.S. government approves Comcast's plan to take control of the TV and movie company.
But the filings, which were submitted to the Federal Communications Commission, did little to immediately allay critics of the deal, who were concerned about Comcast's control of NBC's television shows and movies in cable, television and on the Internet.
They dismissed pledges by Comcast, which plans to buy a majority stake in NBC Universal from General Electric, to offer an additional hour of children's programming each week using multicast channels of NBC owned-and-operated affiliates, and lengthen the amount of time that ratings information appears at commercial breaks.
The top U.S. cable provider also urged the FCC not to condition the deal to take into account online video distribution.
It would be inappropriate for the Commission to impose any conditions on the transaction based on the possibility that online video distributors might one day emerge as direct competitors to Comcast's terrestrial cable business, the Comcast/NBC Universal filing said.
Comcast is the No.1 U.S. residential Internet service provider and NBC owns a third of Hulu.com, the most popular U.S. website for viewing TV shows.
The public interest group Public Knowledge disagreed vehemently with Comcast's argument.
We are incredulous that Comcast and NBCU would downplay Internet distribution of video at a time when the FCC has repeatedly identified online video as one of the primary drivers to broadband adoption, said Harold Feld, legal director of Public Knowledge in an email statement.
The commission must make certain competitors will have access to Comcast and NBC programming as the online market evolves, said Feld.
On Capital Hill, Rep. John Conyers, chair of the House Judiciary Committee, said he was looking for more.
Such additions might include commitments to independent programming in addition to its already stated commitment to diverse programming, maintaining access to sports programming, and ensuring that consumers still have access to their favorite shows online for minimal or no cost, said Conyers in a statement.
TRICKY APPROVAL FROM FCC?
Craig Moffett, analyst at Bernstein Research, said the key issue was Comcast-NBC's power in both distribution and programming.
The regulators will focus on Comcast's ability to raise prices for consumers and programming fees to other distributors like satellite TV providers, he said.
The FCC's review could be trickier for Comcast and NBC than the Justice Department's review because the commissioners could force Comcast to provide content to competitors even if they disagree on the fees associated with those deals.
The companies described their deal as a vertical transaction, which means that they are not rivals but different steps in the same supply chain. U.S. antitrust regulators tend to shy away from challenging such deals on antitrust grounds.
Under the terms of the deal, Comcast would get 51 percent of a new joint venture that includes NBC Universal, valued at $30 billion, and Comcast's own cable networks, valued at $7.25 billion. GE would own the remaining 49 percent.
As payment for its stake, Comcast will contribute $6.5 billion in cash and its cable networks.
The filing, and subsequent reaction, presaged a long public battle, said Jeffrey Silva, a telecommunications expert with Medley Global Advisors, LLC.
You can expect that public interest groups are going to ask a lot more concessions, he said. This is just the beginning.
(Reporting by Diane Bartz and Yinka Adegoke; Editing by Maureen Bavdek and Robert MacMillan)