New $30 billion joint venture arrives...
Comcast and General Electric sent out announcements to the press this morning saying that the long-expected Comcast and NBC Universal deal is official. According to the companies, Comcast and NBC Universal are creating a new joint venture 51% owned by Comcast and operated by Comcast. In exchange for their 51% stake, Comcast is paying $6.5 billion in cash up front, as well as an additional $7.25 billion in cable assets. NBC Universal meanwhile is taking on $9.1 billion in debt to finance the deal. Under the new model, Comcast would own one out of every five viewing hours on television.
Of course whether the deal does anything for consumers differs depending on who you ask. "The opportunities for collaboration and innovation that it creates will generate consumer benefits that we are eager to explore," says Comcast CEO Brian Roberts in an e-mail to employees obtained by Broadband Reports. Comcast this week officially announced their upcoming Internet video service will be dubbed "Fancast Xfinity TV."
Consumer advocates meanwhile flooded our inbox with their complaints just moments after Comcast and GE officially announced the deal. Free Press quickly issued a white paper
(pdf) highlighting the anti-competitive problems the deal creates for competitors and consumers.
"The combination of the country’s largest cable company, a TV network and a movie studio could present grave dangers to a free and open Internet," complains Gigi Sohn of Public Knowledge. "The sheer size of the transaction makes a Net Neutrality rule that much more necessary, as more content comes under the control of another giant media company," says Sohn. "Regulators will have to make certain that Comcast does not give advantage to NBC programs and films over others."
Comcast and General Electric will now wait for regulatory approval, which could take up to a year. While it seems likely the deal will get approved (both parties rarely see a massive media merger they don't adore), this particular approval process will run into the FCC's current effort to formalize network neutrality principles. If the approval gets caught up in the typical argumentative wash of network neutrality, things could move very slowly for Comcast.