FCC skeptical over Comcast, NBC Universal merger

CHICAGO - The Internet should not become the "province of gatekeepers and toll-gate collectors," FCC Commissioner Michael Copps said in blunt opening remarks at a public hearing here Tuesday on the proposed merger of Comcast Corp. and NBC Universal Inc.

The Comcast/NBC Universal deal is a scene-setter for the future of media in the United States, said Copps, the FCC's leading skeptic of the deal. He reiterated his position that winning his approval for the merger remains a "steep climb" for the two companies.

"I cannot and will not accept halfhearted assurances from the industry" related to the public benefits of the merger, he said.

Copps was the only one of the FCC's five members present at the hearing. His views notwithstanding, observers say they believe that the merger will be approved by the Federal Communications Commission and the Department of Justice, although with conditions that would limit Comcast's market power.

In an interview with The Inquirer later in the day, Copps warned that other media companies would seek government approval for their own mergers if Comcast were allowed to move forward with its proposed acquisition of NBC Universal. And that, he said, could lead the nation down a dangerous path of diminished newsrooms and fewer independent voices on television.

"If you let our competitor get big, you have to let us get big" would be the attitude among Comcast's competitors, Copps said. Control of the Internet could consolidate into the hands of a few big corporations, in a manner similar to control of radio stations across the country, he said.

Officials from neither Comcast nor NBC Universal participated in panels Tuesday on Internet competition and cable-TV programming and market power.

In an interview, Comcast spokeswoman Sena Fitzmaurice, who was in attendance, said that the commitments the company has made regarding the merger, such as pledging to carry more diverse programming and maintaining the editorial independence of NBC News, were "significant and unprecedented."

The scheduled seven-hour hearing began at 1 p.m. in an auditorium on the campus of Northwestern University Law School in downtown Chicago. About 50 people attended during the early hours of the sometimes-wonky discussion.

Officials said they expected a larger turnout during the evening's public-comment period.

FCC Chairman Julius Genachowski appeared via a prerecorded video on the importance of the regulatory-review process. FCC Commissioner Mignon Clyburn had been expected to attend the hearing but canceled. Neither of the two Republican commissioners were there, leaving only Copps and lower-level FCC officials in attendance.

Recently, Comcast has been moving to neutralize opponents of the merger. In the last month, the cable giant said it would continue to present big-time sports events on over-the-air NBC-TV stations if the merger were approved - which would bolster the struggling NBC broadcast network.

Comcast also has said it would fund $6 million of independently produced shows over four years.

Addressing diversity issues, Comcast has agreed to name a Hispanic member to its board of directors within 24 months of the deal's closing, as well as appointing a Hispanic advisory board.

Against this backdrop, the FCC scheduled its first hearing in Chicago, where Comcast serves 43 of every 100 homes with pay-TV services. It also owns a 30 percent stake in the regional sports network, with broadcast rights to Blackhawks, White Sox, Cubs, and Bulls games.

If Comcast completes its purchase of NBC Universal, it also would own the major NBC-TV affiliate in Chicago.

Most of panelists attending Tuesday's hearing voiced concern over whether Comcast could stifle emerging competition on the Internet by squashing so-called over-the-top Internet providers such as Hulu, or whether it could use NBC Universal's content to exert market power in negotiations with other pay-TV distributors.

Jeffrey Blum, deputy general counsel at Dish Network, the nation's No. 2 satellite-TV operator, said during the first panel of the day, on Internet competition, that the merged Comcast/NBC Universal conglomerate could interfere with its attempt to offer online video.

"Comcast and NBCU said their merger would be benign in nature, and we disagree."

Expressing similar concerns was professor Susan Crawford of the Cardozo Law School at Yeshiva University in New York, who said:

"I am worried about the future of the Internet."


Contact staff writer Bob Fernandez at 215-854-5897 or bob.fernandez@phillynews.com.