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Posted at 6:00 PM ET, 12/22/2010

Regulators' review of Comcast-NBC deal expected to continue into 2011

By Cecilia Kang

update 6:00 p.m.: with analyst's comments on online video conditions

Federal regulators are expected to continue their reviews of Comcast's proposed merger with NBC Universal into next year, dashing the companies' hopes that the deal would be tied up more quickly.

Comcast said in a statement Wednesday that while the transaction is making "substantial progress toward approval," the companies now estimate the deal will close in January.

"[B]ecause of the lead time required to prepare for the close, it now appears that we will not be able to close the transaction with GE relating to NBC universal by year-end," said Sena Fitzmaurice, vice president of communications for Comcast in a statement.

Sources familiar with the thinking of regulators at the Federal Communications Commission and Justice Department said that even though there is a desire to finish reviewing the deal soon, the likelihood of that happening before year's end was low. The sources spoke on condition of anonymity because the review is ongoing.

The Justice Department is investigating the deal for possible antitrust issues, while the FCC is conducting a review of the public impact. The FCC needs its five commissioners to vote on any conditions attached to the merger before giving final approval. The conditions would be circulated among the FCC's five members for consideration as early as this week and then put to a vote several days later.

Regulators are expected to focus on several aspects of the merger that could affect television and Internet video industries. One condition the agency is expected to attach is that Comcast allow its newly acquired library of NBC content also be available to Internet video platforms such as YouTube and Apple TV.

Rebecca Arbogast, an analyst at Stifel Nicholaus, noted that Comcast and NBC Universal executives had met as recently as last weekend with FCC staff to discuss online video conditions to its merger, according to federal filings.

In that meeting, Comcast said any conditions on Internet video sharing should consider how competitors in the market are also distributing content to Web platforms such as Netflix streaming.

"While it offered no further details, that seems to suggest there could be a condition to give online video competitors access to NBCU programming based to some degree on what media conglomerates such as Disney/ABC (DIS) and News Corp./Fox (NWS) are making available," she said.

The deal was announced in December 2009, and Comcasst and NBC had hoped to conclude the regulatory review and close the merger by the end of 2010. The New York Times first reported on the regulators' reviews extending into next year.

By Cecilia Kang  | December 22, 2010; 6:00 PM ET
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At this point, the faster, cleaner course of action would be for GE to spin out NBC Universal as a separate, publicly traded company. That's what Viacom did with CBS and what Time Warner did with its cable properties.

Posted by: mattintx | December 22, 2010 4:21 PM | Report abuse

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