Comcast-NBCU FCC Staff Work May Go into Early 2011
FCC staffers reviewing Comcast’s planned purchase of control in NBC Universal may not complete their work this year, as the companies hope, said commission officials and industry executives not part of the ongoing staff work. They said there have been indications in private comments from commission officials familiar with the deal that an order on the multibillion-dollar transaction may not be finished in 2010. Staff work on Comcast-NBC Universal, with Internet video continuing to be a key area of focus, likely will be complete in the first quarter of 2011. though there’s still a possibility work will be done this year, commission and industry officials said. Once bureau work is done, an order will be circulated for a commission vote, which will take additional time.
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It will be a stretch for the Media Bureau review to be done by Nov. 26, commission and industry officials said. That’s when the commission’s non-binding shot clock would reach 180 days if it’s not paused again, and the time by which the regulator aims to act on any deal before it. The clock was at day 74 Wednesday. Among the reasons for an extended review is that the deal involves both horizontal and vertical integration and has implications on how broadcast and cable programming goes online and over-the-top via set-top boxes, said communications lawyers not involved in the deal review. A bureau spokeswoman declined to comment.
DOJ seems likely to end its review (CD July 12 p1) before the FCC does, though the department may wait until the commission review is nearly complete before disclosing the results of its review, industry and commission officials said. Both agencies still are expected to ultimately approve the transaction, though Justice may order some asset divestitures and the commission will require conditions, communications lawyers said.
Comcast and NBC Universal continue to be concerned that their transaction get commission approval this year, agency and industry officials said. When the deal was unveiled Dec. 3, Comcast and NBC Universal parent General Electric said they expected nine to 12 months of regulatory review, and a Comcast executive recently said the commission and Department of Justice are working to end review on their original schedule so the deal can be completed this year (CD July 29 p1). A fear of the merging companies is that regulatory review will be dragged out, a concern they've apparently voiced to the commission, FCC and industry officials said. Comcast CEO Brian Roberts told investors last month that the company is working to get the deal completed this year, which he expects to occur.
"It was never realistic to expect that it happens in this calendar year anyway, so the idea that it would slip into 2011 isn’t exactly a shocking bit of news,” said cable stock analyst Craig Moffett of Sanford Bernstein. “If it slips much beyond the early part of 2011, investors are going to start to get nervous. Not so much because they think it’s destined for a rejection, but because the longer it drags on, the higher the probability that the conditions attached are either more severe or unacceptable to Comcast."
Comcast could resist commission efforts to place curbs on Web video “because that’s a key interest to the merging parties,” said communications lawyer Michael Hazzard of Arent Fox, who specializes in antitrust law. There likely would be “less pushback” from the companies if Justice requires Comcast to sell some NBC Universal-owned TV stations or other assets to approve the deal, he said. “This is really a different kind of merger, so I think that people are taking their time,” he said of the FCC. “The conventional wisdom that it will be the first quarter or second quarter of this year is quite right, and no one has ever lost money betting on delay at the FCC.”
"The real question is going to be what the conditions are going to be,” not whether the commission approves the deal, as seems likely, Hazzard said. FCC staff examining the deal appear “to be giving a fair amount of attention to over-the-top video and the impact on the pay-TV and broadband markets,” said analyst Paul Gallant of Washington Research Group. “It’s a complex area that’s novel to the commission, hence the extended review.”