Comcast Clears One More Hurdle

It's the end of NBC as we know it. How do you feel?

The European Commission has approved a proposed deal where Comcast (Nasdaq: CMCSA) and General Electric (NYSE: GE) would pool their cable networks to create a $30 billion joint venture known as NBC Universal. That wasn't the final hurdle, nor the biggest one, but significant nonetheless; all that stands in the way of consummating this deal today is approval from American regulators.

The EC decided that, "the transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it," as NBC's cable networks don't overlap with Comcast's to any great degree over there. So far, so good. French media conglomerate Vivendi would pass its 20% stake on to GE, which in turn plans to give a 51% stake to Comcast while holding on to the rest.

But the intricate dance is under fire on the American home turf, partly because of NBC's substantial online interests, including a 30% stake in Hulu. Many observers see Comcast restricting access to NBC's huge media library in various ways, either keeping Despicable Me and Saturday Night Live off of competing online media platforms altogether, or charging exorbitant license fees.

Defending the business combination in front of an FCC panel on Tuesday, Comcast said that the online video market is too new to regulate, that the company wants as many eyeballs on its content as possible, and that there's "no incentive" to keep all the goodies to itself. Others note that Comcast plus NBC would be unique in producing lots of original content while also owning the largest broadband Internet system available to American consumers.

Comcast is a known opponent of network neutrality rules, alongside other large Internet service providers including Verizon (NYSE: VZ) and AT&T (NYSE: T). In fact, Comcast has already been slapped on the wrist over throttling undesirable network traffic for no good reason. Against that backdrop, and speaking as an American consumer, I'd much rather keep NBC and Comcast separated in order to safeguard this young Internet's multimedia vibrancy.

If I were a Comcast shareholder, I might feel different about the whole affair, whether or not the company intends to abuse a unique cross-industry position. But even then, I'd be of two minds: Play your cards right, and the new NBC could bring lots of new value to the Comcast network, but any anti-competitive missteps would probably lead to a swift dose of possibly brutal justice. It's a fine line to walk.

All told, I understand why the Europeans don't care one way or another about this deal, but I hope on behalf of consumers and investors alike that Comcast is denied at the goal line. How about you?