Lawmakers to dissect NBC Universal buyout
If there were any doubt as to the level of federal scrutiny that GE and Comcast face in their deal for NBC Universal, the signal came quickly from Capitol Hill, where lawmakers rushed Thursday morning to issue statements of concern and announce plans for committee hearings.
While the deal already is reigniting debate over the perils of big media, authority to approve the merger lies with the Department of Justice or the Federal Trade Commission, with either entity hashing out who will get oversight over a process that could take nine months to a year. The Federal Communications Commission also will have a say, and its chairman, Julius Genachowski, issued a statement through a spokeswoman saying that they will “carefully examine the proposed merger and will be thorough, fair and fact-based in its review.”
The deal also has significance in that it marks the first major media merger to come during the Obama administration, which has given many signals of a more rigorous enforcement of antitrust laws.
Obama during the campaign and in his years as a senator was fairly outspoken in his criticism of media consolidation. He told Broadcasting & Cable in June 2008 that when it came to media pacts, federal authorities should “closely scrutinize all mergers for their implications for competition and consumer choice.”
The Justice Department’s assistant attorney general in the antitrust division, Christine Varney, has indicated a stronger hand on such matters than during the Bush years. “Antitrust must be among the frontline issues in the government’s broader response to the distressed economy,” she said in a speech before the Center for American Progress in May.
Liberty Media chairman John Malone expressed concern about the merger last month, when he told the Associated Press that it would force competitors to “look pretty hard on how they can protect themselves from the kind of market power that would represent.”Other competitors were reluctant to publicly pass judgment, in part because it is inevitable that their concerns will be raised by regulators. One executive said the question isn’t so much whether a merger will be approved, but what conditions are placed on it, leaving Comcast chief Brian Roberts with little choice but to accept the terms in the zest to get it done.
As if to preempt concerns that will be raised by federal officials, Comcast on Thursday issued a list of nine “public interest commitments,” including one to deal “fairly with all non-affiliated video programmers.”
Regulators, however, may merely look at that as a “road map” and require that all their commitments be made conditions of approval, one exec at a competing company said. With consumer groups already raising alarms in opposition, a concern is what stringent conditions are placed on the deal beyond that. “It will not get through without conditions, they know that, and the conditions will take out all of the synergies,” the exec predicts.
Whatever the case, the top executives of GE, Comcast and NBC Universal are sure to become familiar faces on C-SPAN in the coming months. House Judiciary Committee chairman John Conyers (D-Mich.) said the committee will soon conduct hearings on the deal. “A merger of this magnitude involves a complex regulatory process and heavy public scrutiny,” he said. Also planning hearings were Rep. Rick Boucher (D-Va.), chairman of the subcommittee on communications, technology and the Internet. In the Senate, Sen. Herb Kohl (D-Wis.) said he planned a hearing through the antitrust subcommittee he chairs.