Comcast-NBC Deal Coming To A TV Near You
LIANE HANSEN, host:
The Federal Communications Commission approved Comcast's merger with NBC Universal this past week, but that approval came with conditions. The deal creates a media giant that will control much of what viewers watch and the way they access it, including many of the shows on television and the cable that delivers them to viewers.
The new company will connect millions of homes to the Internet and control one of Hollywood's biggest movie studios. In other words, if you watch, download, subscribe or buy a ticket, you may be doing business with the new merged company.
Joe Flint has been covering the story for the Los Angeles Times and he joins us from Los Angeles. Hi, Joe.
Mr. JOE FLINT (Los Angeles Times): Hello.
HANSEN: How big a deal is this?
Mr. FLINT: It's a very big deal. Basically, it is combining the nation's largest distribution company, Comcast, which has over 22 million cable subscribers, another 16, 17 million broadband subscribers, with NBC Universal, which owns, of course, NBC, Universal Pictures, cable networks such as USA, Bravo, CNBC, Sci-Fi. It's the first really big - I hate to sound cliche - but 21st century media merger. And a combination of distribution and content is what has so many people concerned about it.
HANSEN: Now, there were no clear antitrust issues. NBC Universal and Comcast operate in different markets. But the FCC was very concerned about this. Why?
Mr. FLINT: Both the FCC and Justice Department really scrutinized this deal. And, as you note, there were, on the surface, no anti-competitive issues. But even though on paper there weren't any rules to violate, just the sheer magnitude of the merger and lumping together content and distribution caused a lot of concern, specifically when it comes to new areas, such as online video.
Comcast is primarily a cable operate and the government wants to make sure that Comcast armed with all this new content doesn't do anything to stifle the growth of what will likely be the biggest competition to cable - online video.
HANSEN: Now, to get the deal through the companies had to make a lot of promises about how they would do business. I mean, what did they agree to do and what does it mean for the average television viewer or consumer?
Mr. FLINT: There were two elements to the deal and one had to do with the public interest aspects to it. And in that case, Comcast was offering to do more children's programming, more programming aimed at minorities. They agreed to add a Hispanic board member. They did a lot of outreach to different communities to try to get sort of backing.
A lot of that, a cynic might say, is a little bit of window dressing because the real issues here for consumers and for the media industry is what Comcast will do with all this new power they have. And on that note, basically, the FCC and Justice Department laid down conditions that they hope will make it very difficult for Comcast to, one, withhold their own content from competing distribution services and, two, not carry rival programming on their own distribution services.
You know, in the online world, basically if there's an online video competitor that is able to get programming from, say, a Disney or a Warner Brothers or a NewsCorp, then Comcast would have to do a similar deal with that company. Those are the sorts of conditions that the government put in that they hope will stop Comcast from any plans it might have of stifling the growth of online video and new distribution platforms.
HANSEN: What about - I mean, let's talk just a little bit about money. Will consumers still be able to get, I mean, just Internet service at a reasonable price?
Mr. FLINT: Yes. One of the conditions actually of the deal is that, you know, Comcast has to sell its Internet service to consumers who just want that and maybe don't want a cable box. You know, all of that will be in place. The interest part for consumers - and we won't know until a few years down the road - is just how effective these conditions will be in not limiting the development of online video.
One of the great concerns of the cable industry is consumers dropping their cable subscription and just keeping a broadband connection, figuring they can get all their entertainment that way. And, you know, that's something that we'll see play out in the next three to five years, whether these conditions were tough enough to encourage growth of the online video marketplace.
HANSEN: Joe Flint of the Los Angeles Times. Thank you very much.
Mr. FLINT: Thank you.
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