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January 21, 2011 > Comcast-NBC merger protects consumers, competition and innovation

Comcast-NBC merger protects consumers, competition and innovation

Settlement gives California authority to provide oversight on $30 billion telecommunications joint venture

Submitted By Michelle Quinn

California Attorney General Kamala D. Harris announced, on January 18, a settlement that places conditions on the $30 billion joint venture of Comcast and NBC Universal to safeguard innovation and protect consumer choice.

The state reached this settlement in conjunction with the U.S. Department of Justice and the state attorneys general of Washington, Texas, Florida and Missouri.

"This settlement will preserve the right of consumers to enjoy the best content at the best prices and encourages a competitive environment where innovation can thrive," Harris said. "With these protections, this settlement strikes the right balance between protecting consumers and ensuring a fair playing field without preventing economic development."

Comcast, based in Philadelphia, is the largest cable television company in the nation. It is the dominant cable provider in several California markets, including the Bay Area, Sacramento and Fresno. Comcast also offers Internet and telephone services to homes and businesses and owns several popular cable channels, including regional sports channels and the E! Entertainment channel.

The combination would give Comcast ownership of NBC Universal's programs, local stations, production facilities, cable channels including MSNBC, CNBC, Bravo and USA Network and a major film studio. NBC Universal, based in New York City, is also part owner of Hulu.com, which distributes television programming and other video over the Internet.

The settlement prohibits Comcast/NBC Universal from withholding its content from competitors, including other cable companies and Internet providers, who control the "pipes" to consumers. It prevents the joint venture from unfairly raising the price for its content to other cable companies or Internet providers, which could prompt these companies to increase pay-television prices for their viewers. It also prevents Comcast/NBC Universal from restricting or degrading access of its content to other cable companies or Internet providers.

Comcast must relinquish all control over Hulu.com and continue to supply NBC content to the website.

California will be able to independently enforce provisions in the settlement for at least seven years. Under the terms of the settlement, the court retains jurisdiction that will allow California or any other party to enforce the agreement, modify it and punish violations.

For example, California will be able to prevent Comcast/NBC Universal from retaliating against any broadcast TV network, cable programmer, local TV station or video producer for providing video programs to a Comcast competitor. The settlement gives California the power to enforce Comcast's obligation to provide any online video distributor the same programs it provides to any traditional pay-television system with equivalent terms and conditions. Additionally, Comcast must not restrict the further distribution of its video programs by companies to whom it sells programs.

The Federal Communications Commission has also issued an order approving the proposed transaction with conditions.

For more information, visit http://oag.ca.gov.

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