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Update: Comcast-NBC applies for federal review, questions about Internet remain

Update: with response from public interest group and rewording on online video market comments from Comcast
Comcast and NBC Universal told the Federal Communications Commission today that their merger doesn’t present anticompetitive concerns but offered no new commitments to the agency beyond what was announced last month.

They talked about the online video market, which they said is nascent and of which they are small payers. Public interest groups said their filing didn't answer some key questions on how the merger of the nation’s largest Internet and cable service provider with media giant NBC would affect the new market. They said it could put too much video content into the hands of Comcast and forestall competition in the nascent online video market. Officials of the companies said instead that the filing was intended to expand on their defense of their merger, but not to expand their commitments to things like program access to online video providers and small cable operators.

“Availability of professional video content for online distribution likewise does not constitute a barrier that places new entrants at a disadvantage relative to incumbent online video distributors,” the companies said in their filing. They outlined their market share in the online video space but didn’t offer any commitments on sharing NBC content with online video providers that could include companies like Vuze, Boxee, YouTube and Netflix.

Comcast and GE (parent company of NBC Universal) made their so-called “public interest filing” to the FCC at noon today, kicking off what is expected to be about a year-long regulatory review of the merger. A spokeswoman for the FCC declined to comment on the filing. The Justice Department received the companies’ application for antitrust review earlier this week.

Public Knowledge, a public interest group that has expressed concern about the merger's affect on consumers, said in a statement that the filing to the FCC doesn't do enough to address protections for the future on online videos. The commitments made so far have focused on protection of local broadcasting, diversity in media, and competition in the cable, satellite, and over-the-air broadcast market.

The companies downplayed their marketshares in online video. But critics said that as a media powerhouse with Internet pipes running into one quarter of all homes in the U.S., the real questions remain in how the FCC can protect a burgeoning market from becoming dominated by a merged entity.

“We are incredulous that Comcast and NBCU would downplay Internet
distribution of video at a time when the FCC has repeatedly identified
online video as one of the primary drivers to broadband adoption," said Harold Feld, legal director of Public Knowledge. “When the Commission considers any conditions to this transaction, it must take into account both existing online competitors and those the
Commission hopes will emerge."

Some analysts said the FCC, which is in the middle of crafting open-Internet access rules, could impose similar conditions to the merger to ensure Comcast doesn’t favor NBC shows and Universal movies over the content of competitors. The FCC attached those so-called net neutrality rules to AT&T’s merger with Bell South in 2006.

The firms reiterated their commitment to local broadcasting, saying they would provide 1,000 more hours of local news and information to NBC’s local stations. And they said they wouldn’t turn NBC’s broadcast operations into cable channels.

By Cecilia Kang  |  January 28, 2010; 12:43 PM ET
Categories:  Comcast , Media  
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