Comcast/NBCU may be an undone deal


Most of us thought that the joint venture between Comcast and NBCU was completed back at the beginning of the year, but a routine review of the merger was conducted by a federal judge in Washington DC who has threatened to hit the brakes. At issue are arbitration provisions.

According to the Wall Street Journal, the judge is Richard Leon, who has served notice to interested parties that he may not sign off on the merger.

The issue concerns the vertical integration aspects of the merger, which puts Comcast/NBCU in control of both programming and delivery platforms. In particular, it involves recourse for competitors in the distribution arena who feel they are not getting a fair crack at NBCU programming.

Officials involved in approving the merger said the arbitration procedures were intended to help competing companies that have a complaint about their access to Comcast/NBCU content. Ideally, it was hoped that the process would encourage entities with a problem to resolve it on their own without resorting to arbitration.

But Corrie Wright of watchdog Free Press told WSJ that Comcast has the muscle to game that system for as long as it wishes, while the vast majority of competitors likely to run into a problem with Comcast would not.
The judge believes that the situation is ultimately not in the public interest.

There are many ways to address the problem. One possibility is that the relevant portions of the merger can be changed; another is that an annual review be conducted to make sure the provisions are achieving the intended result.