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Comcast to FCC: We Have Met — and Often Exceeded — Merger Conditions

Comcast to FCC: We Have Met — and Often Exceeded — Merger Conditions

Comcast files one-year-anniversary compliance report on its $13.8B merger with NBC Universal (Updated)

Updated 11:10 a.m.

Comcast says it has met — and in many cases exceeded — the conditions set as part its $13.8 billion merger with NBC Universal in January 2011, the company said in a one-year-anniversary compliance report filed Tuesday with the Federal Communication Commission.

“Our commitments and the conditions, though extensive, have been incorporated into our business activities and become part of the company’s ‘DNA,’” wrote Comcast Executive Vice President David Cohen in a blog post about the report on Comcast's website

Also read: Comcast-NBCU: The Strange Bedfellows at Year One

"The substantial public interest benefits promised by the transaction and the competitive safeguards sought by the FCC are being realized," Cohen wrote.

Comcast is required to file compliance reports every year for seven years. The FCC is not required to respond or take action, unless a third party should complain to the commission that Comcast is not, in fact, meeting its requirements.

Many of the FCC conditions sought to maintain fair competition, to ensure the newly formed company would allow access to its vast library of films and television from both Universal and NBC. Comcast agreed to forgo its management slice of the video-sharing site Hulu, which NBC had managed along with Fox and ABC.

It also called upon the new company to maintain and expand local news and to augment diverse programming choices, as well as and minority ownership opportunities.

Also laid out were conditions in keeping with the FCC's net-neutrality policies, making sure that Comcast-NBCU would not impinge upon the marketplace choices of its 22.3 million video subscribers and 18.1 million internet subscribers.

In his post, Cohen delineated points made in the filing to the FCC, adding: "We are proud of the achievements of our first year – from increasing broadband adoption among low-income Americans, to increasing local news coverage, expanding the carriage of diverse programming, to committing to launch new independent channels with diverse ownership.” 

He wrote that in the filing to the FCC, Comcast-NBC Universal says in its first year it has:

>> Launched Internet Essentials — “the largest and most comprehensive broadband adoption program in America.” As of Dec. 21, 2011, it is said to have connected more than 41,000 homes to the internet (an estimated 80,000 children and 160,000 low-income Americans), most for the first time.

>> Surpassed its first-year broadband expansion target by 544 miles (for a total of 2,044 miles), bringing internet service to 33 rural communities, exceeding its commitment by 27 communities. Extended its broadband plant to 199,876 additional homes, satisfying almost 50 percent of the three-year commitment of 400,000 homes. These were in California, Florida, Michigan, New Mexico, Pennsylvania and Virginia.

>> Increased carriage of diverse networks such as the Africa Channel by 2 million homes, Mnet by 4 million homes, and TVOne by 600,000 homes.

>> It also has expanded distribution of seven Hispanic or Spanish-language independent networks by 14 million homes, surpassing the three network and 10 million homes target in its commitment.

>> Committed to launching 10 new independent channels by 2019 — and is already halfway through its eight-year commitment.

>> Increased video-on-demand choices available to its customers at no additional charge to an average of 24,000 per month, up from the 15,000 average monthly choices before the transaction closed. Comcast's VOD service, the report says, is the only on-demand service that offers shows from all four broadcast networks as soon as the day after it airs.

>> Invested millions to preserve and enrich the output of local news, local public affairs and other public-interest programming on its NBC- and Telemundo-owned stations. NBC Owned Television Stations Group scheduled an increase of almost 2,000 hours annually, exceeding the commitment’s requirement by nearly 100 percent. Telemundo Station Group increased local news and public affairs programming at the stations by more than 1,200 hours, exceeding the commitment by more than 20 percent.

>> Committed to expand partnerships with non-profit news organizations. As a result, Pro Publica partnered with NBC 4 New York; the Chicago Reporter with NBC 5 Chicago; WHYY with NBC 10 Philadelphia; and KPCC Southern California Public Radio with NBC4 LA.

>> Invested more than $17 million in public-service campaigns focused on parental controls and digital literacy, childhood obesity and FDA nutritional guidelines. The company says it has exceeded its commitment by more than $2 million.

>> Increased children’s VOD programming by approximately 1,000 choices, exceeding the first year commitment by 500 choices, or 100 percent. Total children’s VOD programming choices now average 3,000 per month, up from 2,000 before the deal.

>> Made substantial investment in sports programming. Comcast-NBCU extended its rights to National Football League programming, National Hockey League programming and to the Olympics. Sports programming will also be featured on Telemundo, which successfully bid for World Cup and other FIFA soccer events from 2015 through 2022.

>> Established a $20 million venture capital fund to expand opportunities for businesses with minority ownership in new media content and applications. The program funded the training for five start-up businesses with minority ownership as each developed a business case and pilot.

(Update: In a response to the Comcast filing late Monday, Greg Babyak, head of government affairs for Bloomberg LP said in a statement that the compliance report "includes revisionist language that deliberately misstates its own legally binding commitments … on the news neighborhooding condition in the Order on Comcast-NBC-Universal."

The order, Babyak said, "requires Comcast to include all independent news and business news channels 'if Comcast now or in the future carries news and/or business news channels in a neighborhood.' Comcast has refused to implement this time-limited condition for more than a year. It’s now time for the FCC to move swiftly to force the company to live up to its commitments.")