Comcast this week filed the requisite paperwork with two federal agencies to begin a formal review of its proposed merger with NBC Universal, sparking a new wave of criticism from some of the advocacy groups that have launched a concerted campaignto scuttle the transaction.
Earlier this week, Comcast (NASDAQ: CMCSA) provided the Justice Department with its Hart-Scott-Rodino notification, a confidential pre-merger filing required for federal antitrust reviews.
Then on Thursday, the company delivered a public interest statement to the Federal Communications Commission, which would also have to sign off on the deal.
For critics, the deal signals a dramatic consolidation of the media landscape, aligning two major content and distribution players in an arrangement that threatens to reduce access to independent programming, drive up prices for consumers and undercut emerging forms of online video.
Free Press Executive Director Josh Silver called the FCC filing “positively Orwellian,” likening Comcast’s customer service to corporate villains Enron and Blackwater.
“The idea that it is magically going to be consumer friendly after it gets bigger doesn’t pass the laugh test,” Silver said.
In its filing, Comcast reiterated its commitment to preserve NBC’s existing affiliate relationships, to keep the network operating in a free, over-the-air model, and to expand local and minority-owned programming.
“In the end, the proposed transaction simply transfers ownership and control of NBCU from GE, a company with a very diverse portfolio of interests, to Comcast, a company with an exclusive focus on, and a commitment to investing its resources in its communications, entertainment and information assets,” Comcast said in its filing.
Comcast also stressed that the merger was more about pooling the companies’ content, saying that its cable systems would continue to be operated under the present standalone corporation rather than the separate joint venture that would be created through the complex deal.
Regarding online video, Comcast characterized the market as highly fragmented and intensely competitive, arguing that even factoring in Hulu, of which NBC owns a roughly 30 percent stake, the companies together account for less than 5 percent of the Web video market.
“Indeed, to the extent that any one company maintains a substantial advantage in attracting online video viewers, that company is Google—not Comcast or NBCU,” Comcast said in its FCC filing.
Harold Feld, the legal director with the digital-rights group Public Knowledge, said he was “incredulous” at the companies’ efforts to “downplay Internet distribution of video.”
“When the commission considers any conditions to this transaction, it must take into account both existing online competitors and those the commission hopes will emerge,” Feld said in a statement. “The commission must make certain competitors will have access to Comcast and NBC programming as the online market evolves.”
Comcast CEO Brian Roberts was in Washington this week to speak to a congressional Internet conference, taking the opportunity to defend the merger and quell fears that Comcast would seek to impose unfavorable or discriminatory terms when it negotiates carriage agreements with rival networks.
Roberts reminded his audience that the FCC has rules with ample precedent regarding program access, carriage and retransmission, a point the company reiterated in its filing with the agency.
Web video is much less clear, of course. Comcast has been aggressively building out its Fancast program, which makes premium content available for streaming to cable subscribers.
Washington is going to become familiar turf for Roberts as he tries to assuage regulators’ and lawmakers’ concerns about the $30 billion merger.
He is scheduled to testify at two congressional hearings probing the merger next Thursday, with more likely to come.