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Powell Warns About Comcast-Disney Local Concentration

2/13/2004 2:19 AM Eastern

Comcast Corp.'s acquisition of The Walt Disney Co. would undergo a tough review, particular with regard to local market concentration, Federal Communications Commission chairman Michael Powell said Thursday.

Appearing on CNBC's Kudlow & Cramer, Powell was asked whether the media merger would raise local cross-ownership problems, and he said it would.

"I think there are going to be some issues, even though they are not rule-oriented," said Powell, whose agency must approve the merger. "Absolutely, they will have some issues and they will be issues we will have to deal with."

In acquiring Disney, Comcast would take control of the ABC network and 10 ABC stations. Comcast, for example, would be the dominant cable-TV company and owner of the ABC affiliate in such large markets as Philadelphia, Chicago and San Francisco.

In response to a court ruling in February 2002, the FCC abolished a rule that effectively barred a cable system from owning a local TV station.

The commission has never reviewed a merger that involved cable-operator penetration of the broadcasting business on such a large scale as a Comcast takeover of Disney.

"Any merger of this sort of monumental size and this level of vertical integration and distribution across so many platforms is unquestionably going to have to go through one of the finer government filters," Powell said. "I can't say what the result would be."

Congress and the public are keeping an eye on large media companies and large merger proposals like Comcast-Disney partly in response to CBS' Super Bowl halftime show, during which singer Janet Jackson revealed her breast with help from Justin Timberlake

"I think both for the regulatory environment and the political environment currently with major transactions of this size, these guys will get a pretty thorough raking over, and we’ll see how it comes out," Powell said.

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