Federal regulators are virtually certain to scrutinize any substantial pairing of cable leader Comcast (CMSCA) and content behemoth NBC Universal, the two media giants at the center of a frenzy of merger speculation, according to antitrust experts. If consummated, the mega-media merger would combine NBC Universal's vast stable of content with Comcast's giant digital-distribution network.

"It's virtually guaranteed that FCC [Federal Communications Commission] regulators would review this deal," Glenn Manishin, a former antitrust counsel and trial attorney at the Justice Department's Antitrust Division, told DailyFinance. "This could be a signature case for Chairman [Julius] Genachowski to demonstrate the principles he enunciated when he was confirmed." Manishin predicted any deal would also face review by the Federal Trade Commission and the Justice Department.
Comcast and GE (GE) are discussing a deal under which the cable giant would buy 51 percent of NBC Universal, with GE keeping the rest. GE would then buy the 20 percent of NBC that it does not own from Vivendi SA, and Comcast would provide cash and some programming assets. GE, the industrial conglomerate, could also turn to another suitor, or spin off the entertainment division.

Genachowski, who is new to the FCC, said during his Senate confirmation hearing in June that ensuring diversity in media ownership is "an important principle and priority." And because of the sheer size of the players involved, not to mention the inter-relation of content and distribution networks, any pairing would be ripe for regulatory review, said Manishin, a veteran Washington, D.C.-based antitrust attorney now in private practice.

In particular, Manishin said the deal would raise flags at the FCC over so-called "vertical foreclosure," a scenario in which Comcast could discriminate in favor of its newly acquired NBC Universal content against rival content producers. Manishin explained that in mega-media deals of this sort, the FCC typically takes a "prophylactic" -- or preemptive -- role, while the Justice Department would wait until an anti-competitive action had occurred.

The FCC will also be interested in the horizontal aspects of the deal, Manishin said, because Comcast, the nation's largest cable-TV provider, would be buying a huge stake in an owner of local television stations around the country.

"Most people watch local television on cable now," Manishin said, "so Comcast could essentially be competing against itself in local cable markets." But coming up with a solution could be difficult, he said. "The normal remedy would be divestiture, but that wouldn't exactly make sense in NBC Universal's case, because they are a television company," Manishin observed.

NBC Universal owns the "Peacock Network," of course. But it also owns 10 FCC-licensed NBC stations in major cities including New York, Chicago and Los Angeles. It owns the Spanish-language Telemundo network with 16 licensed stations, as well as cable networks USA, CNBC, MSNBC and Bravo. Oh, and Universal Pictures and various theme parks. The broadcast networks have more than 200 local affiliates.

Federal regulators will be particularly interested in whether Comcast would discriminate against other broadband companies, such as Verizon (VZ), AT&T (T) and Time Warner Cable, Andrew Lipman, a Washington-based analyst, told Bloomberg.

"There's increased focus at the Federal Communications Commission and Department of Justice on exclusive programming," said Lipman, a Washington-based partner in the media, telecommunications and technology practice at Bingham McCutchen, according to the wire.

Harold Feld, legal director of Public Knowledge, a D.C.-based advocacy group, suggested that legal and regulatory review of any deal between Comcast and NBC Universal is almost inevitable.

"This kind of program access issue is very significant," Feld told the wire. "Given the tenor of this administration, which is both more technologically sophisticated and attuned to these kinds of antitrust concerns, these are issues that the deal would have to have some good answers for."

Much of the talk surrounding the tie-up talks between Comcast and NBC Universal remains pure speculation, and the companies are staying largely mum. But one thing is virtually certain: both sides better get ready to explain to federal regulators why this deal won't run afoul of federal antitrust and competition rules.

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