Despite opposition from critics ranging from non-profit public policy groups to competitors in its own industry, the Federal Communications Commission today approved Comcast's acquisition of NBC Universal.
The move creates a powerful media company like none other in the United States, combining content generation and programming as well as distribution channels across the airwaves, over the Internet and on the biggest cable system in the nation. The agency voted 4-1 to approve the joint venture, with Commissioner Michael Copps casting the lone dissenting vote. The Justice Department followed suit just a couple of hours after the FCC.
The approval comes with a number of caveats from the commission including provisions that make Comcast guarantee competitors access to its broadcast, cable and online content under the general description of net neutrality, which Comcast already has said it could tolerate.
FCC Chairman Julius Genachowski said the deal was made specifically with the public in mind.
"After a thorough review, we have adopted strong and fair merger conditions to ensure this transaction serves the public interest," he said. "The conditions include carefully considered steps to ensure that competition drives innovation in the emerging online video marketplace. Our approval is also structured to spur broadband adoption among underserved communities; to increase broadband access to schools and libraries; and to increase news coverage, children's television, and Spanish-language programming."
Critics, however, panned the approval, saying "free expression online and on television will be worse off as a result of today's action."
"Commissioner Copps was right to dissent, since the conditions adopted by the Commission do not go far enough to justify approval of this deal," said Andrew Jay Schwartzman, SVP and policy director of the non-profit Media Access Project. "Perhaps the worst thing about today's announcement is that it sends a message to other phone and cable companies that they, too, can buy up content providers. We may be about to see a new wave of media consolidation as a result."
For his part, Copps, who has been an outspoken critic of the deal, said the merger will create a company that "reaches into virtually every corner of our media and digital landscapes and will affect every citizen" in the United States and described it as a "damaging and potentially dangerous" transaction.
"It is new media as well as old; it is news and information as well as sports and entertainment; it is distribution as well as content," he said. "And it confers too much power in one company's hands."
Critics of the merger said potential harm from it exceeded the potential good, and wasn't in the public interest.
But an FCC official, during a conference call Tuesday afternoon, said the commission, too, was worried about the power of the entity it was allowing Comcast to create, and reiterated that the rules it had demanded from the MSO would protect the public for at least seven years.
Copps, though, said those protections were overblown.
"Many of the new commitments that have been added aim no higher than maintaining the status quo," he said. "It is also claimed that the duration of the commitments made by Comcast-NBCU are longer than any that have been attached to previously-approved mergers. That may be true--but it is also true that power is patient and that big businesses can bide their time when they have to in order to reap the fullest harvest."
Critics, and there are many, say the deal allows for the "cable-ization" of the open Internet and increases the potential for walled gardens, toll booths, content prioritization, access fees to reach end users, and a stake in the heart of independent content production.
"We should be moving in precisely the opposite direction of what this Commission approves today," Copps said. "I believe loopholes remain that will allow Comcast-NBCU to unduly pressure both distributors, especially small cable companies, and content producers... Consumers can still expect to see high prices get passed along to them, as Comcast-NBCU remains free to bundle less popular programming with must-have marquee programming.
"In sum, this is simply too much, too big, too powerful, too lacking in benefits for American consumers and citizens."
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