updated 03:25 pm EST, Tue January 18, 2011
FCC approves Comcast-NBC with Internet conditions
The FCC on Tuesday approved (PDF) the long delayed Comcast-NBC merger but with conditions. It will require that the new company provide its video to Internet and traditional sources on "non-discriminatory" terms if that content is already available to its own online users and to others. Comcast-NBC would be barred from trying to artificially inflate online prices and would have to give Internet rights at prices that are competitive with conventional TV.
More Internet terms would prevent it from making its content difficult to access outside of its network or to interfere with competitive content getting to its network, such as through blocking or throttling. Comcast would also be watched to make sure it didn't try to raise prices on cable Internet access or lower bandwidth caps to force customers into cable TV subscriptions. The anti-rate hike measure was likely instituted after Time Warner tried to curb Internet use through caps so low that an average subscriber would have run out of bandwidth after four 720p movies.
A specific clause prevents the newly unified company from withholding video from Hulu.
Outside of online video, the merged media giant will have to live up to already set promises to expand its broadband to 400,000 extra homes, offer an extra 1,000 hours of news TV, add more on-demand programming for children, guarantee public access television and promise not to limit the distribution of programming from other channels depending on whether or not they're affiliated.
All of the terms will last for seven years regardless of whether or not net neutrality rules are upheld.
The decision comes despite objections from critics, who felt that any merger created a risk of net neutrality abuses and media consolidation. Democrat FCC Commissioner Michael Copps was the lone dissenter in the vote and warned that it could lead to a violation of the very open principles of the Internet. After the seven-year limit expired, Comcast-NBC could effectively segment off its customers and favor its own content, either by charging for access beyond its own borders or by giving its own content special priority. He alluded to Level 3's dispute with Comcast as a sign of what could go wrong.
"[The] joint venture opens the door to the cable-ization of the open Internet," Copps said in a statement. "The potential for walled gardens, toll booths, content prioritization, access fees to reach end users, and a stake in the heart of independent content production is now very real."
Many have expressed concern that Comcast-NBC would make it difficult to access Netflix or could deliberately pull its video from iTunes, Amazon VOD or other services that let users drop cable Internet access.
Comcast and NBC are expected to close on the deal by January 28, when its current pay cycle ends.