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Business Impact

3 governors urge FCC to allow Comcast-NBC deal

WASHINGTON (AP) – The governors of three large states are urging federal regulators to let Comcast Corp. proceed with its plan to buy a controlling stake in NBC Universal for $13.75 billion.

In a letter to the Federal Communications Commission, Governors David Paterson of New York, Arnold Schwarzenegger of California and Ed Rendell of Pennsylvania say that “the significant benefits associated with the creation of this new joint venture far outweigh any potential harms.”

Comcast, the nation’s largest cable TV company, is seeking federal approval to buy a 51 percent interest in NBC Universal from General Electric Co. The FCC and the Justice Department are expected to approve the deal with conditions attached.

Comcast already owns some cable channels, including E! Entertainment and the Golf Channel. The deal would give it control of the NBC and Spanish-language Telemundo broadcast networks, cable channels such as CNBC, Bravo and Oxygen, and the Universal Pictures movie studio and theme parks.

The cable company hopes regulators will be persuaded by the governors of three states where Comcast and NBC Universal are large employers. Comcast and NBC Universal have nearly 130,000 employees in 40 states, with the most jobs in New York, California, Pennsylvania and Florida.

“Comcast has made clear that this venture is not about cutting jobs, but about growing NBCU’s businesses,” the governors wrote.

Rival subscription video companies fear Comcast will use its control of NBC Universal to push up prices for popular programming or even to withhold it altogether. Small, independent programmers also worry that Comcast cable systems could drop competing channels or relegate them to premium tiers with fewer subscribers.

And public interest groups are concerned that Comcast will begin charging for content online and that the company will have too much power in local markets where it would own both the NBC station and the dominant cable system.

But the governors wrote that the deal will help the combined company grow its new-media business to bring consumers “more programming choices over more communications technologies.” It will also “help preserve national and local broadcast television by getting the NBC and Telemundo television networks on a solid footing,” the governors wrote.

Comcast, which is based in Philadelphia, has ties to the Pennsylvania governor’s office. Comcast Executive Vice President David Cohen served as chief of staff to Rendell, then mayor of Philadelphia, from 1992 to 1997.

Copyright 2010 The Associated Press.

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