FCC Seen Not Playing Big Role in ViacomCBS Review
The FCC isn't seen likely to play a role in regulatory review of CBS buying former sibling Viacom (see 1908130050). That would fit with some recent precedent, like when AT&T bought Time Warner.
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Some are less sure the regulator will play no or little role in the new deal. They noted in interviews the agency under then-Chairman William Kennard was part of the review the last time the two combined, in 2000. The deal isn't seen likely seen facing major regulatory headwinds, though it will be closely scrutinized at least by DOJ. The companies and FCC members didn't comment Thursday.
Unlike "the behemoth" that is Disney/Fox or AT&T/Time Warner, ViacomCBS is "the deal of also-rans," said media regulatory lawyer Owen Kurtin. Even recombined, ViacomCBS won't be as powerful as those companies or Comcast/NBCUniversal, he said. The deal shouldn't be at risk from government regulatory interference, MoffettNathanson analyst Michael Nathanson wrote investors Wednesday.
Broadcast industry officials don’t expect an FCC review because the transaction likely won’t involve a transfer of control of CBS’ TV licenses. The companies are “going to do everything they can to minimize FCC involvement,” said Peter Tannenwald of Fletcher Heald. DOJ likely will review the sale, but antitrust regulators should look at it in light of the current media market, said Business in the Public Interest Chairman Adonis Hoffman. "Legacy media companies need scale to compete in today's high stakes, high-dollar market,” Hoffman emailed. “This merger should be reviewed in light of a changing, dynamic video market where Big Tech is rewriting the rules." NAB and Free Press declined to comment.
Viacom and CBS, as horizontal competitors, would be looked at closely by DOJ as it tries to evaluate whether eliminating a competitor in the video programming universe adversely affects competition, noted an antitrust/media lawyer. She said if there is FCC review, one of the biggest questions would be determining how the proposed deal would benefit the public under the public interest standard. The FCC and DOJ can be of different minds about their reviews.
Kurtin said the FCC would have jurisdiction to review the deal if it wanted, using anything from regional or national broadcast licenses to wireless cable network node licenses as an "in." The agency potentially could use media ownership rules with regard to CBS owned-and-operated stations, he said.
ViacomCBS could be a prelude to a larger deal, such as a tech giant buying the combined company to compete with content/distribution combinations like AT&T, Comcast or Disney, Kurtin said. He said it's unlikely Disney, AT&T or Comcast would be interested in buying ViacomCBS because that type of deal is far more likely to face intense regulatory scrutiny.
The transaction is raising some red flags. Public Knowledge Legal Director John Bergmayer emailed that even though National Amusements already controls a majority of voting shares in each company, the deal will add to the overall trend of higher prices and a fragmented viewing experience. "A media marketplace of 3 or 4 super-giant media conglomerates is not what our country needs," he said.