Watch This Media Merger With a Close Eye

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Nine months after the banns were read, the union of Comcast (Nasdaq: CMCSA  ) and General Electric's (NYSE: GE  ) NBC Universal isn't universally popular. But I think the nearly $14 billion deal, which was announced last December, will be approved.

One of the rubs, which has caught the eye of the Justice Department, is the potential that Comcast's control of NBC's television and film content could prove detrimental to the still-youthful Internet video market. That nascent market is being served by the likes of TiVo (Nasdaq: TIVO  ) and Netflix (Nasdaq: NFLX  ) . One concern among cable operators is that those companies will horn in on their traditional role, prompting Comcast and its pals to roll out their own Web-video offerings.

Also taking a dim view of the proposed deal are satellite video companies DIRECTV (Nasdaq: DTV  ) and Dish Network (Nasdaq: DISH  ) , which are desirous that a Comcast/NBCU combination be specifically required to share their content on reasonable terms, as the stand-alone cable operators are now required to do.

And then there's Minnesota senator (and former NBC employee) Al Franken, who is avidly opposed to the pending combination. In an 11-page letter to the Federal Communications Commission, Franken said he "firmly believe(s) that the Comcast/NBCU merger should be rejected. The harms caused by this merger are significant and longlasting. No set of promises or conditions ... can sufficiently mitigate those harms."

Comcast apparently has spent a king's ransom lobbying and fighting for the merger. Its tools have included full-page ads in the Washington Post, Roll Call, and Politico, among other publications. At the same time, the company has said it wouldn't have an incentive to withhold programming from its competitors, and, in fact, to do so would run afoul of the law.

I'm betting that the merger will be approved -- likely with some changes in the companies' operations. As such, I'd urge Fools with a bent for media to watch Comcast closely. I continue to believe that postmerger there'll be money to be made in that name.

Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned above. He does, however, welcome your questions or comments. Netflix is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.

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