The Federal Communications Commission's top official has given his approval to Comcast Corp's NBC Universal purchase, but would require several crucial conditions.
FCC Chairman Julius Genachowski's support marks a major step forward for a deal that was announced more than a year ago and has been subject to intense scrutiny by federal officials, consumer groups and media industry competitors.
Genachowski, in an order circulated within the agency on Thursday, said Comcast's deal for NBC Universal would meet the so-called public interest standard but made clear that several conditions would have to be addressed.
Among the areas that have drawn his concern, according to FCC officials familiar with the order, are online video, program access and program carriage. The FCC officials declined to provide details of how Genachowski's proposal would deal these concerns and others.
Any of the other FCC commissioners can suggest changes to the order before it is put to a vote. The deal must also be approved by the U.S. Department of Justice. FCC officials said there has been full cooperation between the government agencies. A Justice Department spokeswoman said its review is ongoing.
Genachowski's support indicates the deal could close in January, a timeframe officials from Comcast pointed to earlier this week when they acknowledged that the review was taking longer than expected. Comcast had hoped to complete the process this year [ID:nN22100964]
Comcast, the largest U.S. cable company, is buying a 51 percent stake in NBC Universal from General Electric Co to create a $30 billion business that would include broadcast, cable networks, movie studios and theme parks.
In a statement, Comcast said: We are gratified that the FCC Chairman's Office has circulated an Order to the offices of all Commissioners that would lead to approval of our transaction.
It added that the draft FCC order as circulated ... will enable us to operate the NBC Universal and legacy Comcast businesses in an appropriate way.
One area FCC officials said would be addressed is online video, where they want to be sure that Comcast would not stifle the emerging market if it assumed partial control of Hulu, a joint venture of NBC Universal, News Corp and Walt Disney Co.
At issue is whether Comcast, since it also controls a major broadband delivery system, could put Hulu competitors like Netflix Inc at a disadvantage by slowing down the delivery of its movies and TV shows.
Comcast could also wield considerable discriminatory power over rival pay-TV outlets because of the wealth of programing and networks it would own once the deal closed, including leading networks such as USA, Bravo and MSNBC.
One potential solution, analysts said, could have the FCC insist that Comcast submit programing fee disputes to an arbitrator.
Arbitration would be one of the worst things they would have to agree to, said Thomas Eagan, analyst at Collins Stewart.
Shares of Comcast were down 12 cents at $22.08 on Nasdaq. GE shares were unchanged at $18.06 on the New York Stock Exchange.
(Additional reporting by Diane Bartz in Washington; Editing by Gerald E. McCormick and Tim Dobbyn)