Comcast-NBCU FCC Review May be Overseen by Outsider

The FCC is expected to hire an outsider to oversee review of Comcast’s planned buy of NBC Universal to augment existing staff efforts of what many inside and outside the commission see as a unique deal because of the combination of broadband and cable with broadcast properties, agency and industry officials said. The move would be unusual in that most major transactions before the regulator are solely reviewed by long-time officials, though not unprecedented because of this commission’s hiring of outsiders for various roles. The regulator has looked at hiring existing employees and people outside the agency for the new role, FCC and industry officials said. It decided to hire an external candidate, an agency official said. We couldn’t learn the person’s name. This commission has used outsiders to work on the National Broadband Plan, most notably Blair Levin, who led that work.

The new hire likely will lead a steering committee of bureau chiefs and other high-ranking staffers that in turn oversees the commission’s transactional review team for the deal, FCC and industry officials said. That a steering committee is coordinating work by the transaction review team -- consisting of staffers from the Media Bureau and other bureaus and offices -- has been said to be unique to the deal (CD March 25 p6). Every major deal before the commission is reviewed by a transaction team, which continues its work on this deal even though the FCC last month paused its merger review clock as staffers await a study on online video competition and one on the perceived benefits of the deal which they requested from Comcast, NBC Universal and NBCU parent General Electric (CD April 19 p1), commission officials said. A Media Bureau spokeswoman declined to comment.

The office of Chairman Julius Genachowski, under whose direction the staffer will work, was closely involved in the decision to add an employee to focus on the deal, agency and industry officials said. Commissioners’ offices weren’t closely involved in the process, agency officials said. The new hire will communicate with all five FCC members and existing staffers in the new role, one official said. Part of the job also will involve speaking with those lobbying the commission on the deal, the official said. The appointment isn’t meant to change the direction of existing staff work on Comcast-NBC Universal, whose work won’t be redone, but instead is meant to provide an independent perspective on the process, the official said.

The forthcoming hire will likely become a full-time commission staffer but the particular position likely will end once review of the Comcast-NBC Universal is finished, FCC and industry officials said. Being a full-time employee will give the staffer more credibility with commissioners, said a communications industry attorney who helps arrange media deals but isn’t involved with Comcast-NBC Universal. “They seem to be making preparations for a big fight -- this seems to be the right call” to handle a “hot potato of a deal,” he said.

The forthcoming hire comes as FCC staffers are “extraordinarily stretched with all the things that are going on now,” including execution of the broadband plan and looking at how to proceed with net neutrality after the Comcast case, said Professor James Speta of Northwestern University, who teaches antitrust law. “It’s not surprising to me the commission would decide this transaction needs a lot of resources devoted to it. The fact they're bringing in someone from outside strikes me as a little unusual, but not terribly unusual. There are a number of academics who at any time are engaged as special consultants on a variety of matters, be they engineering or economic or legal matters.” Dale Hatfield, now at the University of Colorado, was a special supervisor of conditions on AOL-Time Warner after that deal was approved by the FTC, noted Speta, who filed in support of Comcast in its network management case.

With “so many old and new media issues here” the combined company “will be a new creature we haven’t seen before,” said the attorney who works on other deals before the commission. The agency has hired external officials for economic studies but the deal lawyer and other communications attorneys couldn’t recall a time when an outsider was hired to review a specific transaction pending before the regulator. “This commission is doing a lot of things differently,” said Senior Vice President Andrew Schwartzman of deal opponent Media Access Project, who hadn’t been briefed on the new hire. “So this commission doing something like that wouldn’t surprise me.”