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On January 18th the Federal Communications Commission (FCC) and the Department of Justice (DOJ) gave Comcast, the country’s largest cable company, the green-light to take over NBC Universal. Comcast already owns a handful of cable channels, including E! Entertainment and the Golf Channel. However, through its acquisition of a fifty-one percent stake in NBC from GE it will obtain control over the NBC and Telemundo broadcast networks, CNBC, Bravo, Oxygen, along with nearly twenty other cable channels, Universal Studios and theme parks, and close to a thirty percent stake in Hulu.com (which is also owned by News Corp., Disney, and Providence Equity Partners).
This deal will certainly turn Comcast into an entertainment juggernaut, and fears surrounding content availability and marketplace competition have been a major concern both for government regulators and Comcast’s competitors. In approving the deal, both the FCC and DOJ imposed a multitude of conditions — an unprecedented step — and the first time the FCC has attempted to regulate online video distribution in this manner. Several of these conditions are aimed specifically at content availability and Internet video providers.
Of greater concern to consumers, is what this deal might mean for Hulu.com. Many feared that this merger might signal an end to the availability of free NBC content on the site when Comcast takes over, since the company has attempted to compete with Hulu through a variety of means, including its own online video site. To protect Hulu’s independence and growth, Comcast will be stripped of its voting rights and limited in its ability to yank NBC content off the site. FCC officials stated that these conditions prevent Comcast from stifling the site’s development and, by allowing Comcast to maintain an equity stake, ensure that the company has “some skin in the game.”
However, even with these conditions fears abound that Comcast is simply too big. As a content and service provider, Comcast has enormous incentives to discriminate against other networks and the means to do so in a variety of ways. Furthermore, the success of this deal will be closely monitored as Comcast competitors consider other mergers and further media consolidation. While the FCC attempted to address these concerns through its conditions, it remains to be seen how effective those restraints will be against the growing Comcast network, and what effect the merger will have on Internet streaming. One thing is certain: how Comcast responds to its superpower status will have a huge impact not only on the development of online video distribution, but on the future of the media and entertainment industry in general.
– Joanna Barry
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