Comcast Could Suffer From Universal Access

Comcast may be paying relatively little to buy control of NBC Universal. But the true cost won’t be clear until regulators have decided what conditions to impose.

One subject investors should watch: how those reviewing the deal treat the fast-changing area of online video. Public-interest groups and satellite-TV firms have asked the Federal Communications Commission to ensure that a merged Comcast (CMCSA)-NBC Universal not be allowed to withhold its content from rivals online.

That is a worrisome prospect for Comcast investors. It could potentially give a leg-up to online video services, ranging from Netflix (NFLX) to Sezmi, a venture-capital-backed broadband video service that competes directly with cable. In doing so, it would undermine Comcast’s ability to protect its core cable-TV business. As Sanford C. Bernstein analyst Craig Moffett notes, one of the “critical lines of defense” in the debate about video cord-cutting—consumers dropping their cable subscription in favor of cheap Web video—is that content companies won’t make their content available for alternative business models unless the economics make sense.

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