The clear message from Washington today is: Don’t expect any quick approval of the Comcast's purchase of NBC Universal.
Comcast and NBC Universal executives told reporters Friday that while they are hopeful the deal will pass regulatory review within a year, they anticipate approval could take up to mid-2011.
Briefing Washington reporters about expected regulatory review procedures, David L. Cohen, Comcast’s executive VP, and Rick Cotton, NBC’s exec VP-general counsel, said the deal is effective for a year, but either party can request one of two three-month extensions that would effectively extend terms for a total of 18 months.
Cohen also said Comcast had made a filing with the Securities and Exchange Commission also on Friday that deatils the contact that would be made between Comcast and NBC during the period of review.
Although Comcast won’t make decisions for NBCU during the period, it does get approval rights of certain deals and contracts. Any new contracts or contract extensions of more than three years of NBCU business employees making more than $750,000 a year have to approved by Comcast, and raises of 15 percent of NBCU executives also have to be approved.
Comcast and NBC also gain some other rights of approval of longer term deals during the period, subject to federal rules.
Four congressional committees have announced plans for hearings on issues in the transaction, though none has yet set dates.
Cohen noted that this represents the first major anti-trust review for the Obama administration -- a review that could either be handled by the Justice Department or by the Federal Trade Commission.
It's also the first big review of “public interest” obligations by the new Federal Communications Commission.
“In a transaction of this magnitude, anyone who has any grievance has the right to come forward,” said Cohen.
Although critics have questioned whether consumers would be hurt, Comcast and NBC have suggested consumers would benefit. Comcast has promised to increase programming for children and for Hispanics and boost news and public affairs programming, but hasn’t said exactly how.
And at the press meeting,Cohen and Cotton said that the deal will lead to more local news coverage, and no reporting cutbacks, but they didn’t say how. Comcast owns the New England Cable Network news channels, while NBC owns MSNBC as well as local stations which air news.
Questions about the implications of the deal continue to reverberate in Washington.
Susan Eid, senior VP of government affairs for DirectTV, said in a statement that the company is “evaluating the potential effects of this transaction on our company,” and suggesting “it certainly creates significant media concentration.”
She cited San Francisco Bay Area as one example, saying Comcast controls roughly 60 percent of the video market, owns two regional sports networks and, if the deal goes through, also will own the NBC and Telemundo stations there.
“We expect the government will closely scrutinize this deal to protect consumers, choice and competition,” she said.
Sen. John Kerry, D-Mass., who heads a communications panel of the Senate Commerce Committee, called the deal “extremely significant” and said it “raises some complex questions that I fully expect Obama Administration officials will consider carefully.”
U.S. Rep. Maurice Hinchey, D-N.Y., founder and chairman of Congress' Future of American Media Caucus, warned the deal would have “a devastating impact” on Americans ability to receive unfiltered access to news, information, and entertainment programming from a wide array of sources.
"Comcast already has significant control over content distribution and this acquisition would enable it to expand that control into content production,” he said.