WASHINGTON (Reuters) - Comcast Corp’s (CMCSA.O) NBC Universal deal faces a long and intense regulatory review that will likely end in approval only after the cable giant agrees to give rivals access to NBCU’s television shows and movies, experts said on Thursday.
The U.S. government’s concern will likely focus on ensuring Comcast’s rivals, like Verizon Communications Inc (VZ.N), DISH Network Corp (DISH.O) and smaller cable operators, can continue to show NBC Universal’s programs.
Herb Kohl, a Democrat who chairs the Senate’s antitrust subcommittee, said the panel had already heard from the chairmen of Comcast and General Electric.
“We intend to be vigilant on this and make sure that the public interest is served and not only corporate interest, although they are part of the American scene also,” said Kohl, whose subcommittee has promised hearings on the issue.
Kohl, however, said in an interview with Reuters that he could not give the companies’ proposal a quick thumbs up or down but added: ”It’s not going to be done in a short time because it’s (so) big.
Comcast and General Electric Co (GE.N) unveiled their NBC Universal deal on Thursday, planning to set up a joint venture that is 51 percent owned by Comcast and 49 percent by GE. The deal would give Comcast, the top U.S. cable service provider, control of a major media conglomerate.
Antitrust experts said it could take the U.S. Federal Communications Commission, which reviews broadcast license transfer applications, and the Justice Department or Federal Trade Commission, which oversee antitrust law, a year to work out conditions to get a green light for the deal.
“I think it will get to closing. I don’t think anybody’s going to stop the deal,” said antitrust expert John Briggs of the law firm Axinn Veltrop Harkrider LLP.
Public interest groups, nonetheless, have urged the Obama administration to keep its commitment to reinvigorate U.S. antitrust laws by rejecting the proposed deal outright.
They fear that Comcast might charge other cable distributors higher fees to transmit NBC Universal-owned content, leading to higher cable bills.
“There are no indications that this merger could be good for the public in any way,” Free Press policy director Ben Scott said in a statement. “It will lead to higher cable bills, fewer independent programing choices, and less competition.”
Consumers Union, which publishes Consumer Reports, had a similar concern. “The federal government should approach this merger with deep skepticism,” said policy analyst Joel Kelsey.
They have a point, said Evan Stewart, an antitrust expert with Zuckerman Spaeder LLP, who expected eventual approved.
“I imagine that the bigger issue is the cable industry rather than the content industry,” he said. “I‘m referring to Comcast not having any price constraints.”
John Kerry, who chairs the Senate subcommittee on communications, technology and Internet, said his panel will also watch to ensure public interest concerns are addressed.
Google CEO Eric Schmidt told Reuters after the White House jobs summit that he had “no particular concerns right now” about the deal.
Asked if Google would lobby the administration to block it, Schmidt said: “I would never say no, but I think it’s unlikely.”
To head off anticipated criticism, Comcast Executive Vice President David Cohen offered “voluntary public interest commitments” that included expanding children’s and diverse programing and continuing free over-the-air television through the NBC and Spanish-language Telemundo broadcast networks.
But the expectation was that regulators would step in.
“They’ve got a lot of ways to play with all these assets so the question is, ‘How can they screw their competitors?'” said Briggs. “That’s their job, after all.”
FCC Commissioner Michael Copps said as the economy recovers, there could be more deals to marry content and distribution. “The lodestar for this review must be the public interest,” said Copps.
The Justice Department’s antitrust chief, Christine Varney, and FTC Chairman Jon Leibowitz declined to comment. The two agencies share the job of enforcing antitrust law.
Reporting by John Poirier and Diane Bartz; Editing by Richard Chang, Bernard Orr