Federal Communications Commission regulators are taking a deeper dive into Comcast's efforts to snap up a controlling stake in NBC Universal. It sent letters to both companies on Oct. 4 with a laundry list of questions, according to an Associated Press report.
The questions reportedly center on how Comcast (CMCSA) distributes content and, in particular, how the cable giant makes decisions on which programming to offer. On the flip side, regulators are questioning NBC Universal about its contracts with other content distributors like satellite, cable and phone carriers.
It should come as no surprise that antitrust regulators are looking to turn over more stones in this deal, given how dramatically it would increase the cable giant's content offerings and ability to control content that would otherwise get pumped to some of its rivals.
Satellite and cable companies, as well as phone carriers, are concerned that Comcast may limit access to NBC content or jack up its prices once it officially gets its 51% stake. NBC's lineup includes such popular channels as Bravo, CNBC and Oxygen.
Independent Programmers Have Reservations, Too
Under a complex deal, General Electric (GE) is selling a 51% stake in NBC Universal to Comcast for $6.5 billion in cash. Antitrust regulators at the Department of Justice, as well as FCC, are examining the deal, but the FCC letters signal an additional, more extensive probe.
Companies that distribute content aren't the only concerned groups. For example, independent programmers are fearful that Comcast would drop channels that would compete with any NBC offering. And some industry players have expressed reservations over what may happen to the emerging industry of online video.
FCC regulators are reportedly taking at least a cursory look at online video in the Comcast-NBC deal, according to the AP report. NBC has an investment stake in online video site Hulu, which allows users to watch free and paid TV shows and movies on their computers.
The FCC's more aggressive probe is earning kudos in some quarters. Policy Counsel Corie Wright of Free Press, a nonpartisan advocacy group that promotes "diverse and independent media ownership," issued a statement commending the agency "for scrutinizing the merger's impact on the media marketplace." Added Wright: "The FCC's job is to ensure that this merger is in the public interest. So far, Comcast and NBC have failed to meet their burden of demonstrating that the merger would benefit competition or consumers."