FCC Requests Input On Comcast, NBC Universal Deal

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Federal regulators are reviewing the proposed merger between NBC Universal and Comcast. It's a deal valued at between $14 and $30 billion. The Federal Communications Commission holds a public hearing on the deal in Chicago on Tuesday. While few observers expect regulators to block the merger, some hope the FCC will require far-reaching consumer protections.

MARY LOUISE KELLY, Host:

Federal regulators are reviewing the proposed merger between Comcast and NBC Universal. The Federal Communications Commission holds a public hearing today in Chicago. Few expect it to block the merger, but some hope regulators will impose restrictions to protect consumers.

Joel Rose reports.

JOEL ROSE: Once the proposed merger was announced, it didn't take long for the NBC show "30 Rock" to start making fun of it.

Here's how Alec Baldwin's character reacts to a rumor that the network is being sold to a Philadelphia company called Cable Town.

(SOUNDBITE OF TV SHOW, "30 ROCK")

ALEC BALDWIN: (Jack Donaghy) How could a company from Philadelphia buy a company from New York? That would be like Vietnam defeating the United States in a ground war.

ROSE: But while NBC was sinking into last place among the major networks, Comcast was building an empire. The company's gleaming two-year-old headquarters towers above the Philadelphia skyline. In a conference room on the 45th floor, senior VP Joe Waz says consumers will benefit from the merger.

JOE WAZ: It's going to let the combined company bring division of an anytime, anywhere digital future to millions of Americans.

ROSE: Waz is talking about the company's plan to offer video to its subscribers through cable and the Internet.

Since the merger was announced in December, it's drawn relatively little opposition. That may have something to do with the $3 million Comcast spent on lobbying in the first quarter of this year alone. The company has also gotten letters of support for the merger from organizations like the Urban League and the Hispanic Federation.

None of this surprises Harry Jessell, editor of the website TV News Check.

HARRY JESSELL: Comcast has been a pretty good corporate citizen over the years. They've donated money to things. They've supported things. When they have a deal like this and they need to call on community groups to say hey, remember we did so-and-so for you, it's payback time.

ROSE: The received wisdom in Washington is that it's a question of when, not if the deal gets federal approval. But not everyone thinks it's good public policy.

SUSAN CRAWFORD: It's a giant merger that's going to change the media landscape. I'm not sure that people are paying enough attention to it at this point.

ROSE: Susan Crawford is a professor at Cardozo School of law in New York who's writing a book about the merger. She says Comcast built its business on having must-see programming, including sports and news that consumers can't get anywhere else. Now Crawford says the company wants to extend that model to the Internet by controlling online access to NBC shows like "30 Rock" and popular cable channels like USA and MSNBC.

CRAWFORD: The only way to get access to the programming you love, that you're addicted to, is to pay a monthly subscription fee. That may raise prices for everyone.

ROSE: That could also mean the end of free ad-supported video sites like Hulu, because Comcast will insist that you pay for its content.

Federal regulators can avoid that, Crawford and others say, by putting some significant restrictions on the merger. For one, they could require Comcast to show that it's pricing its programming fairly, and they could extract a promise that Comcast will treat all online traffic equally, a principle known as net neutrality.

But Comcast VP Joe Waz says net neutrality doesn't need to be a condition of the merger.

WAZ: We embrace the principles that a consumer should be able to go anywhere they want to go on the Internet, should be able to use any applications that they want. Net neutrality is the way we operate.

BEN POPKEN: This is a company that has spent millions against net neutrality.

ROSE: Ben Popken is managing editor of the Consumerist blog. He's referring to the battle Comcast fought after it was caught two years ago secretly blocking some of its Internet customers from sharing large files.

Popken says that episode, along with the company's perceived reputation for poor customer service, motivated his readers to name Comcast the worst company in America earlier this year.

POPKEN: The history of this company says that the FCC would be foolish to not place some pretty strong contingencies on this arrangement.

ROSE: Comcast representatives dismiss The Consumerist poll as a cheap stunt. The official public comment period for the Comcast-NBC merger is over, but the public will get a chance to vent at the end of today's FCC workshop.

For NPR News, I'm Joel Rose, in Philadelphia.

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