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Comcast’s legal win raises questions for education


Approval of the Comcast-NBC Universal deal could have a lasting impact on schools and colleges.

Educators and students could see new internet service options after the federal government on Jan. 18 gave Comcast Corp., the country’s largest cable company, the green light to take over NBC Universal, home of the NBC television network, in a deal that is likely to shake up the internet landscape.

Public-interest groups, meanwhile, hope consumers won’t see new restrictions on content distribution as a result of the deal.

Comcast is buying a 51-percent stake in NBC Universal from General Electric Co. for $13.8 billion in cash and assets. The deal raises many questions, however, as public-interest groups have expressed concerns about what will happen to accessibility when one of the county’s largest suppliers of broadband pipeline joins forces with one of its largest suppliers of content.

The Justice Department said it reached a settlement with Comcast and NBC Universal that allows the companies to proceed with the deal, subject to several conditions. These conditions will help ensure that the transaction cannot “chill the nascent competition posed by online competitors,” said Christine Varney, head of the Justice Department’s antitrust division.

Among these conditions are provisions that could increase the amount of children’s programming available and help subsidize broadband service in low-income communities.

Still, education officials, especially at small college campuses and K-12 districts without massive technology budgets, have tracked Comcast’s imposition of fees for online video after a Netflix partner raised concerns about the practice in November.

And while many school and campus technology officials have supported the FCC’s “net neutrality” plans, Comcast has stood in firm opposition to the federal regulations that would prohibit broadband internet providers from slowing access for some customers or to certain websites.

The five-member Federal Communications Commission voted 4-1 to approve the Comcast-NBC Universal deal. Michael Copps, one of the commission’s three Democrats and an opponent of media consolidation, voted against the transaction.

With the deal certain to transform the entertainment industry landscape, both the FCC and Justice Department are attaching conditions to prevent Comcast from trampling competitors once it takes control of NBC’s vast media empire.

Among other things, they’re requiring Comcast to make NBC programming available to competitors, including rival cable companies, satellite operators, and new internet video services that could pose a threat to Comcast’s core cable business.

Regulators want to ensure that emerging online video platforms being developed by companies such as Netflix Inc., Amazon.com Inc., and Apple Inc. can get the movies and TV shows they need to grow—and potentially offer a cheaper alternative to monthly cable subscriptions.

Philadelphia-based Comcast has about 23 million cable TV subscribers and nearly 17 million internet subscribers.

It also owns a handful of cable channels, including E! Entertainment and the Golf Channel, and has a controlling interest in the Philadelphia 76ers and Flyers sports teams. Comcast’s SportsNet Philadelphia channel carries Flyers, Phillies, and 76ers games.

Taking over NBC will transform the company into a media powerhouse.

NBC Universal owns the NBC and Telemundo broadcast networks; 26 local TV stations; popular cable channels including CNBC, Bravo, and Oxygen; the Universal Pictures movie studio and theme parks; and a roughly 30-percent stake in Hulu.com, which distributes NBC and other broadcast programming online.

The regulatory approvals establish an arbitration process to resolve disputes between Comcast and competitors who want to buy programming.

They prohibit Comcast from withholding programming during negotiations—a practice that broadcasters have been using recently to extract higher fees from cable companies.

A handful of other conditions are designed to ensure that Comcast cannot stifle the growth of the fledgling internet video market by starving the new industry for content.

One requires the company to offer its programming to legitimate internet video providers on the same terms and conditions that it offers other pay-TV providers.

Another requires the company to make comparable programming available at comparable prices to an internet video provider that has reached an agreement to buy programming from another media company.

Yet another condition requires Comcast to continue offering an affordable, standalone broadband option for customers who want internet access but not TV service.

This condition, too, is intended help drive the growth of online video by allowing consumers to cancel their cable subscriptions without losing their internet connections.

The FCC and the Justice Department are also requiring Comcast to relinquish its management rights in Hulu to ensure that it cannot interfere with the development of competing online services. Comcast will still be required to make NBC content available to Hulu, however.

Another key condition being imposed by both agencies bars Comcast from discriminating against internet video traveling over its broadband network. Although the FCC recently adopted industry-wide “net neutrality” rules barring broadband providers from interfering with Internet traffic on their systems, those regulations are likely to be challenged in court. The condition would ensure that Comcast, which has come under fire for discriminating against internet traffic in the past, would still have to abide by the rules.

Other FCC conditions require Comcast to increase local news coverage, expand children’s programming and programming for Spanish-speaking viewers, add 10 new independent channels, and provide a subsidized broadband service for low-income households. The FCC is also prohibiting Comcast from giving its own channels preferential placement in its cable system line-ups.

At least one public-interest watchdog was pleased with the government’s online video conditions. Mark Cooper, director of research for the Consumer Federation of America, said they could help pave the way for Internet distributors to break the cable industry’s “stanglehold” over the video market.

Some others weren’t so sure.

“This will ultimately mean higher cable and Internet bills, fewer independent voices in the media, and less freedom of choice for all American consumers,” Sen. Al Franken, D-Minn., said in a statement.

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