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Senator Asks DOJ to Take Another Look at Comcast-NBCUniversal Merger

Sen. Richard Blumenthal (D-Conn.) said that he has asked that the Justice Department to investigate the Comcast-NBCUniversal merger and whether it will pose a threat to consumers after conditions to the transaction expire in September, 2018.

He referenced the transaction, approved by the Justice Department and the FCC in 2011, at a Senate Judiciary subcommittee hearing on antitrust law and enforcement. But it also comes with renewed scrutiny on media mega-mergers, as the DOJ challenges AT&T’s proposed merger with Time Warner and reports that the Walt Disney Co. is nearing a deal to purchase most of the assets of 21st Century Fox.

Blumenthal said at the hearing that if the set of conditions placed on the Comcast-NBCUniversal transaction are not extended, “I believe that this will pose a very serious threat to competition.” The conditions include provisions that prohibit Comcast-NBCUniversal from withholding content from online, cable, and satellite rivals. The company also must comply with anti-retaliation provisions, which are overseen by the FCC and are set to expire on Jan. 20.

Blumenthal even broached the idea that the Justice Department could unravel the merger altogether.

In a letter to Makan Delrahim, the chief of the DOJ’s Antitrust Division, Blumenthal said that “if your investigation determines that the Comcast–NBCU acquisition will produce anticompetitive effects, even if the merger conditions are retained, you may need to consider separating Comcast and NBCU in order to fully restore competition.”

“As a member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, I have previously raised concerns regarding whether the conditions imposed on Comcast and NBCU have achieved their intended effects of promoting competition and protecting consumers and, more broadly, whether these types of conditions can actually work.”

A Comcast spokeswoman said that “there is no credible basis to pursue an extension or modification of the consent decree or conditions. For nearly seven years, Comcast has met or exceeded all of the commitments and obligations under the NBCUniversal transaction. We have filed six annual compliance reports with the FCC setting forth in detail our exemplary compliance track record, none of which has been challenged or objected to by the Commission or any third parties, including by any member of Congress.  The DOJ, which has received substantial information about our compliance with the consent decree, has never pursued any enforcement action against us.”

The spokeswoman added that the marketplace has gotten more competitive, particularly with the growth of online video.

“We have reached dozens of content deals with MVPDs without loss of programming to consumers,” she said.  “In fact, the arbitration mechanism created in the FCC order has been used by only one MVPD over seven years.. There is simply no precedent and no need for the conditions to be extended or modified, or our transaction revisited.”

Blumenthal wrote that the DOJ case against AT&T has relevance to the Comcast-NBCU merger. He wrote that “the very same principles that the Department invoked to justify its suit to prevent the AT&T-Time Warner acquisition suggest that the Comcast-NBCU acquisition must be investigated further.”

Blumenthal’s complete letter is here.

U.S. District Judge Richard Leon, who is presiding over the AT&T-Time Warner case, also signed off on the settlement agreement that paved the way for the Comcast-NBCUniversal deal.

Delrahim has expressed a preference for structural conditions, in which companies sell assets to secure merger approval, versus behavioral conditions like those in the Comcast-NBCU transaction.

A Justice Department spokesman did not immediately return a request for comment.

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