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Vivendi's sale of NBC clears way for Comcast; public interest groups decry merger

With Vivendi's reported agreement to sell its 20 percent stake in NBC Universal for $5.8 billion, the last piece of a puzzle will go into place to allow for Comcast's bid to become an entertainment powerhouse. A merger between Comcast and NBC is expected to folllow soon and give Philadelphia-based Comcast control over choice movies and television shows as well as the cable system to distribute them.

The Los Angeles Times and other news outlets reported Vivendi's move. The French company's reluctance to sell its stake in NBC Universal had been holding up Comcast's bid for NBC Universal, which owns Universal Movies, network shows like "30 Rock" and "The Jay Leno Show" and cable channels USA, Bravo, CNBC and MSNBC.

Already public interest groups are decrying a merger, saying a deal would concentrate too much media within one company, which could be particularly bad for consumers because Comcast would also control how viewers get their shows. Please look at this Post Tech story from last Friday on the unique regulatory challenges the merger would pose as Washington views how the deal could impact future Internet technologies. In the post, an analyst talks about how regulators will likely review the deal into the end of 2010.

“I am especially concerned about the effects the merger would have on evolving technologies for delivering video over the Internet," Andrew Schwartzman, president of public interest group Media Access Project, said in a statement. He worries that consolidation of this kind would give Comcast further incentive to strangle such new forms of competition before they can gain a toehold in the market.

Comcast is about to launch an online video strategy that is part of an industry plan called TV Everywhere. The program, to launch this month, would give cable subscribers access to free online content.

Tim Wu, a law professor at Columbia University and chairman of the public interest group Free Press, points to history as a guide for regulators. He urges the Federal Communications Commission and antitrust regulators at the Justice Department or Federal Trade Commission to block the merger.

Competitors, meanwhile, have warned that a merger could lead to more consolidation in the industry.

By Cecilia Kang  |  December 1, 2009; 7:30 AM ET
Categories:  Antitrust , Comcast , Online Video  
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