Regulators Concerned About What Comcast-NBC Merger Means For The Internet

Here's hoping Waxman manages to plug up the worst loopholes before this deal gets rammed through, because they're right: the future of the internet will be greatly affected by this merger.

Is there no merger too large that the Justice Department won't rubberstamp?

.Although there has been a lot of talk in media circles about what Comcast's ownership of NBC Universal would mean for viewers' choice of news and entertainment, the two branches of the federal government reviewing the merger — the Justice Department and the Federal Communications Commission — are more worried about what the combination means for the online world.

The Web is shaping up to be the No. 1 issue in a mega media merger today, much the way battles over program diversity and commitment to news loomed over media mergers in the past.

"This isn't the run-of-the-mill merger," said Jeffrey Silva, a telecommunications and media analyst with Medley Global Advisors. "Online video is an emerging market and if someone gained power really early, it could stifle it.... That's why there has been so much controversy."

The FCC and the Justice Department have different mandates, although there is considerable overlap between the two.

Generally speaking, the Justice Department's mission is to make sure a merger doesn't diminish competition, and the FCC examines whether a deal serves the public interest.

Rivals, legislators and watchdog groups fear that Comcast, armed with NBC content, will wield too much power in determining how the Internet develops as a medium to watch TV and movies. In addition to the NBC network and Universal Studios, Comcast would also get its hands on big cable channels including USA, Bravo, MSNBC and Syfy.

NBC also owns about one-third of Hulu, the popular online video site.

Congress and federal agencies want to slap conditions on Comcast, which provides cable TV to 1 in 5 homes and has 17 million broadband customers.

The conditions would require Comcast not to withhold its own content — such as cable channels — from any potential broadband competitor or block rival video service providers from accessing Comcast's broadband pipes into homes.

This week, Rep. Henry Waxman (D-Beverly Hills), who is chairman of the House Energy Commerce Committee, sent a letter to FCC Chairman Julius Genachowski and Christine Varney, the assistant attorney general of the Justice Department's antitrust division, outlining the conditions he wants put on the merger.

People close to the review process said Waxman's proposals would probably be very similar to the final terms of the deal.

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