Wednesday, January 19, 2011

Antitrust Division, FCC Conditionally Approve Comcast/NBC Universal Joint Venture

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The Department of Justice Antitrust Division and the Federal Communications Commission yesterday conditionally approved a joint venture between Comcast Corp. and NBC Universal Inc., a subsidiary of General Electric Co.

The joint venture, which was announced in December 2009, combines Comcast–the nation’s largest cable operator and Internet service provider–and NBC Universal’s cable networks, filmed entertainment, and television programming, including the NBC broadcast network. It will be managed and 51 percent owned by Comcast, with GE holding 49 percent ownership.

Antitrust Concerns

Comcast’s control of the NBC Universal programming raised antitrust concerns, since Comcast’s rivals could face difficulties obtaining access to valuable content now controlled by the joint venture.

The Antitrust Division and five state attorneys general filed a civil antitrust lawsuit in the federal district court in Washington, D.C., alleging that the transaction would allow Comcast to limit competition from its cable, satellite, telephone, and online competitors.

At the same time, a proposed consent decree was filed that, if approved by the court, would resolve the competition concerns of the U.S. Department of Justice, as well as California, Florida, Missouri, Texas, and Washington.

Proposed Consent Decree

According to the Department of Justice, the proposed consent decree and an FCC order require the joint venture to make available to online video distributors (OVDs), like Netflix, the same package of broadcast and cable channels that it sells to traditional video programming distributors. In addition, the joint venture must offer an OVD broadcast, cable, and film content that is similar to, or better than, the content the distributor receives from any of the joint venture’s programming peers.

The FCC order requires the joint venture to license NBC Universal content to Comcast’s cable, satellite, and telephone competitors.

In a press release, announcing the settlement, Christine Varney, Assistant Attorney General in charge of the U.S. Justice Department Antitrust Division, said that the Antitrust Division and FCC “consulted extensively to coordinate their reviews and create remedies that were both consistent and comprehensive.”

Programming Benefits

According to an FCC news release, the joint venture will increase local news coverage to viewers; expand children’s programming; enhance the diversity of programming available to Spanish-speaking viewers; offer broadband services to low-income Americans at reduced monthly prices; and provide high-speed broadband to schools, libraries and underserved communities, among other public benefits.

Text of the complaint, proposed final judgment, and stipulation and order appear on the Antitrust Division’s website.

Further details regarding the conditional approval appear here on the Wolters Kluwer Law & Business AntitrustConnect blog.

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