NBC-Comcast merger gets support

The governors of California, New York and Pennsylvania said Comcast’s purchase of NBC Universal from GE would make the television network and cable company stronger, according to a letter sent Tuesday to the Federal Communications Commission.

Governors Arnold Schwarzenegger, David Paterson, and Ed Rendell added their names to the list of lawmakers supporting the deal, which would create a new $30 billion joint venture by merging the Philadelphia cable giant’s content division with NBC’s stable of television networks, film studios and theme parks.

Under the terms of the deal the two would form a new company in which Comcast would hold a 51 percent share, with NBCU’s owner General Electric holding the remainder. The FCC has appointed John Flynn, formerly employed in the private sector, to examine the merger’s impact across a range of media and telecommunications markets.

“This transaction will let two great American companies, Comcast and GE, focus on their respective strengths. By placing NBCU under the management of Comcast, a company whose sole focus is entertainment and communications, we believe it will become a stronger company,” state the governors, who note that they represent the states where the two firms have the most substantial business presence.

The letter notes that Comcast and NBCU accounts employ almost 130,000 people and that Comcast has made it clear it intends to expand NBCU, not eliminate positions. It also praises the companies’ efforts to preserve broadcast television and increase their new media offerings.

The deal has drawn criticism from a range of groups including Communications Workers of America, Independent Film Producers and the nonprofit Free Press concerned about the new entity’s ability to control both the creation and dissemination of content. Despite those concerns the Commission is expected to approve the merger later this year.

“Comcast’s proposed takeover of NBC Universal would be a disaster
for consumers,” said Liz Rose of Free Press. “If the deal goes through, Comcast
would absorb dozens of cable networks and 27 television stations and influence
200 NBC/Telemundo affiliates. It
would be the biggest media takeover in a generation. For consumers, it means higher prices, fewer choices and less
innovation.”.

The letter acknowledges the necessity of a thorough regulatory review, but encourages the government to “move expeditiously and with a clear focus on the merits of the deal.’ The FCC has an informal 180-day timeline in which it will attempt to complete regulatory reviews following the collection of public comment. If the commission were to stick to that schedule, that would indicate a ruling some time during the fourth quarter of this year.