Paul Davidson

USA TODAY

But merger could face tough scrutiny from regulators

Conditions could prevent harm to rival programmers

Terms of Comcast-NBC deal could be extended

The Comcast-Time Warner Cable merger is likely to be approved by regulators, but the proposed cable giant will be subjected to new conditions aimed at protecting rival programmers, antitrust experts say.

The deal would add Time Warner Cable's 11 million cable subscribers to Comcast's 22 million. Comcast already has said it would divest overlapping systems serving 8 million subscribers, but that would still create a behemoth serving about a third of all TV homes and 30% to 40% of broadband subscribers.

The merger likely will be reviewed by the Justice Department, which approved the Comcast-NBC deal, rather than the Federal Trade Commission, says Andrea Agathoklis Murino, a former Justice antitrust counsel. The Federal Communications Commission also must approve the deal, and is largely expected to review whether the broadband networks of the new company are open and non-discriminatory.

Consumer advocacy groups are concerned that the proposed company would be so large that it could determine which TV and online programmers are viable by denying access to some or charging exorbitant fees.

Murino says Justice antitrust chief Bill Baer is likely to seek tough constraints.

"Bill Baer has been very aggressive and is interested in only having remedies that will really remedy" the antitrust concern, says Murino, now a partner with Wilson Sonsini Goodrich & Rosati in Washington, D.C. "It's not going through if it even raises the specter" of antitrust harm. "He has set the bar very high."

Comcast has offered to extend conditions imposed on its acquisition of NBC to Time Warner systems. For example, the company cannot favor NBC and its other content over other networks. And it must supply its programming to Apple iTunes, Netflix and other providers that compete with its cable systems.

Under its "net neutrality" agreement with the FCC, it cannot hobble competing online content providers by slowing their content on Comcast's broadband network, for example.

Regulators also could ensure that the new company does not act as a gatekeeper that treats some TV programmers, including its own, more favorably than an aspiring new network by charging high fees, Murino says.

Besides expanding such restrictions to include Time Warner Cable's network, the length of time that they would be in force could be extended beyond the current terms of the Comcast-NBC agreement, she says.

A recent feud over retransmission fees kept CBS stations off Time Warner systems for a month.

"This transaction is an opening for (Justice) to revisit the terms of the NBC-Comcast merger," Murino says.

But Gene Kimmelman CEO of Public Knowledge, a consumer advocacy group, says the merger should be rejected because it would be difficult to impose clear-cut conditions. "It's not black and white," he says.

For example, he says, the company could use set-top box technology that prevents the online streaming of live TV shows that compete with its cable system. The company, he said, could simply argue that the rival shows don't meet its specifications.

And while conditions could require the company to treat TV programmers equally, it would still be permitted to negotiate prices that may make it impractical for competitors to launch channels.

"They may have so much power through their share of the broadband and video market that they can define" the products and services that reach consumers, Kimmelman says.

Still, Murino says, "Ultimately, I think this goes through," estimating that the review could take about nine months.