Federal regulators appear poised to bless Comcast's proposed $30-billion takeover of NBC Universal, with conditions aimed at limiting Comcast's ability to harm competitors. Those conditions would not speed innovation in the market for TV services, but at least they would blunt Comcast's ability to impede online entrepreneurs and hinder rival networks.
The merger, if it goes through, would give the country's largest provider of cable and broadband services a major Hollywood studio and a leading television network, as well as Telemundo, several popular cable TV networks and a minority stake in Hulu — a website that makes hundreds of TV shows available online, potentially serving as an alternative to cable. But the newly formed powerhouse would have to adapt to a market that's rapidly changing, largely because broadband has become an effective and inexpensive way to distribute video.
The most troubling aspect of the deal is its implication for emerging online alternatives to cable. Under Comcast's control, NBC Universal would have a greater incentive to protect the cable TV business than it would on its own. Granted, the networks haven't exactly been racing to support online ventures that could substitute for cable in the living room; they produce a fraction of the revenue collected from cable. But once a TV-over-the-Internet service shows that it has the potential to generate considerable profits, an independent NBC would be far more likely to embrace it than one that's under Comcast's wing.