WASHINGTON (Reuters) - A federal judge, who had been critical of the Justice Department deal to allow Comcast Corp to buy NBC Universal, signed off on the transaction on Thursday, but added reporting requirements.
The department announced in January that Comcast could buy NBC Universal on the condition it cede control of the popular video website Hulu and make stand-alone broadband service available to customers at $49.95 per month for three years. But the settlement still required final approval from a judge.
In his final order, Judge Richard Leon said he would require Comcast and the department to collect data for at least two years on how many online video distributors, such as Hulu or Netflix Inc, demand arbitration because of a dispute with Comcast.
Online video emerged as a disruptive force for the cable industry as viewing habits changed and audiences increasingly found their favorite entertainment on the PC, tablet or smartphone.
A dispute arising last year threatened to disrupt the Comcast/NBCU deal as Level 3 Communications Inc, which helps Netflix stream videos to viewers, stepped up its attack on Comcast for demanding a fee to carry videos and other bandwidth-heavy Web traffic.
Regulators sought protection for online video by creating a streamlined and less costly arbitration process overseen by the Justice Department to allow online video distributors to get content from Comcast-NBCU when negotiations falter.
Leon expressed concern this process would not allow appeals.
"Since neither the Court nor the parties has a crystal ball to forecast how this Final Judgment, along with its arbitration mechanisms, will actually function ... I believe that certain additional steps are necessary," Leon said in a court order.
Data collected would include how many online video distributors seek Justice Department permission to arbitrate through the new, streamlined system and the number that pursue Federal Communications Commission arbitration if their request is denied.
He also wanted data on how many online video distributors demand Federal Communications Commission arbitration, the outcome of these cases and the number of appeals.
The report is to be given to the court, which will then hold a yearly hearing before Judge Leon.
Comcast is the largest U.S. cable company and is also the top broadband provider.
Comcast completed the purchase of 51 percent of NBC Universal from General Electric Co in January. The deal created a $30 billion business that includes broadcast, cable networks, movie studios and theme parks.
(Reporting by Jasmin Melvin and Diane Bartz; editing by Carol Bishopric and Andre Grenon)