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.

Senate Judiciary Committee’s DOJ Oversight Hearing Touches on Antitrust Issues

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

The “Antitrust Division’s revitalized enforcement” was among the “many good things” accomplished by the Justice Department over the last year, Senator Herb Kohl (D-Wis.) said, commencing a Department of Justice oversight hearing held yesterday by the Senate Judiciary committee.

“Revitalized Enforcement”

Kohl applauded Attorney General Eric H. Holder Jr. for his efforts. Kohl said that, “as our economy rebounds, the Antitrust Division’s revitalized enforcement has fostered a competitive marketplace that encourages innovation and economic development while ensuring consumers have access to high quality goods at the best prices.”

In prepared testimony, the attorney general touted merger enforcement efforts as well as cartel enforcement at the Justice Department Antitrust Division.

“The Department has acted against six merger transactions already in Fiscal Year 2010, reaching settlements to protect competition in the vast majority, including the combination of Ticketmaster and Live Nation, and is currently litigating against Dean Foods, the nation’s largest dairy processor,” Attorney General Holder said. He also noted that the nearly a quarter of a billion in criminal fines were obtained against Antitrust Division defendants so far in the current fiscal year.

While the Justice Department’s role in fighting terrorism was the focus of much of the hearing, antitrust issues were discussed. Before turning to non-antitrust issues, Senator Chuck Grassley (R, Iowa) thanked Attorney General Holder for the Justice Department’s efforts to put on joint antitrust hearings with the Department of Agriculture on the topic of competition in the agriculture marketplace.

The first hearing in the series was held in Iowa on March 12. Attorney General Holder and Agriculture Secretary Tom Vilsack were in attendance.

Comcast/NBC Universal Merger

Senator Al Franken (D, Minn.) expressed his concerns with the proposed merger of Comcast and NBC Universal, now under review by the Department of Justice.

In light of his experience in the entertainment industry, Franken offered his assistance to the Justice Department as it reviews the transaction. The attorney general said that the Justice Department would be glad to work with him and listen to his concerns.

Senator Franken has expressed concern with the enforceability of potential commitments offered by the parties to resolve federal antitrust concerns. He said that he wanted to make sure that merger conditions have “enough teeth” and “long enough life.”

Attorney General Holder said that he was not at liberty to talk about Comcast/NBC deal specifically because of the ongoing investigation. He did say, however, that the Justice Department has enforcement mechanisms to ensure compliance with conditions imposed on merging parties.

Links to a webcast of the Judiciary Committee’s April 14 hearing, as well as Attorney General Holder’s prepared testimony and Senator Kohl’s remarks, are available here.