In a statement, Comcast CEO Brian Roberts said that the decision was driven by “our sense of optimism for the future prospects of NBCUniversal and our desire to capture future value that we hope to create for our shareholders.” Roberts also said that he believes Comcast is in a “strong and unique position” to build value in the combined company.

The Comcast deal will not have to be approved by federal regulators, who fined the cable company $800,000 last year for failing to meet some of the conditions it placed on the original purchase. Comcast said it expects the deal to close by the end of March.

As part of the acquisition, NBCUniversal will also buy the buildings that it uses at 30 Rockefeller Plaza in New York and CNBC’s headquarters in New Jersey for about $1.4 billion. According to the New York Times, a “clash of cultures” was partly responsible for speeding up Comcast’s decision to buy the remaining part of the company.

Comcast also announced its fourth-quarter financial results ahead of schedule, and said its earnings climbed by 19 percent from the same period a year ago, while revenue rose by 6 percent to $16 billion and operating income grew 13 percent to $3 billion. The company said it will increase its dividend by 20 percent and will repurchase $2 billion worth of stock this year.

This story was corrected Tuesday evening to clarify that the deal is not subject to federal approval, as originally stated.

Image courtesy of Shutterstock / Cedric Weber

As part of its investigation, the regulator is also probing three other unnamed companies. The perception is that ISPs in France are either under-investing in infrastructure or violating the spirit of network neutrality, the idea that ISPs should not discriminate on traffic traveling over their pipes. Yet, in France, it seems that at least some in the government are willing to make Google pay for the ability to guarantee that ISP customers can receive its bits, turning the internet into Gulliver in the land of the Lilliputians, with ISPs and governments tying it down. The question is, will what happens in France happen elsewhere?

The ARCEP investigation and user complaints

Early this year, communications regulator ARCEP will rule on an investigation it opened on November 22 following complaints that video streaming services including YouTube are often too slow to watch. Now three French senators are also calling on the country’s digital economy minister to take action.

ARCEP stepped up when a survey of over 16,000 ISP customers by French consumer group UFC Que Choisir found 83 percent of Free customers, 47 percent of Orange customers and 46 percent of SFR customers were unable to use YouTube properly.

Since the investigation began, many users have reportedly noted an improvement in connection quality, but connections remain patchy.

And this issue is not limited to Google. “The quality of connection is inadequate in almost all operators,” said UFC Que Choisir’s survey, which found that France’s native Dailymotion, ironically, is slowest to access through France Telecom’s own Orange ISP, which owns almost half of the YouTube rival. And 25 percent of consumers reported slow-downs while watching broadcaster TF1′s MyTF1 catchup service.

Is it under-investment or a desire to make content companies pay?

UFC Que Choisir says these symptoms may be caused by under-investment in infrastructure as well as commercial tensions between ISPs, which deliver web services to the end user but which don’t pay for the infrastructure. It has called on the government to define quality-of-access rules, in part by allowing the competition regulator ARCEP to build a quality-of-service observatory. Similarly, in the U.S., the Federal Communications Commission is also trying to figure out how to measure the quality of a broadband connection beyond just looking at speeds.

Inter-company tensions do appear to be at play. A case before another public agency — France’s competition regulator, the Autorité De La Concurrence — in September illustrates how ISPs eager for revenue from web content companies can hold the user experience hostage.

Cogent, which handles YouTube’s peering interconnections, had complained to the competition authority that Orange had refused its connections, wanting more money to add ports to connect Cogent traffic to its networks. Much of the interconnections between large ISPs, CDNs and web content companies are negotiated by private deals, so it’s rare to see the government get involved, or even to hear much about them publicly. In the U.S., when Level 3 and Comcast became embroiled in a public peering fight after Level 3 started sending Netflix traffic over its connections with Comcast, the FCC refused to get involved, and both parties settled the disagreement.

But in this case, the competition regulator said one ISP was within its rights to charge more money from services hoping to reach its subscribers. This so-called double-sided business model has been sought by ISPs who argue that companies such as Google are freeloaders making huge profits off the pipes of owned by the ISPs. In contract, Google and other content companies argue that their services are the reason customers upgrade to higher speeds and continue paying ISPs money.

And in France the ISP argument has gained at least one supporter in the Autorité De La Concurrence. The authority says France Telecom is offering interconnection prices significantly below market value, and it has accepted the telco’s undertakings to ensure transparency.

French policymakers generally are generally in the mood to extract more money from Google. They have already set such wheels in motion around taxation and copyright fees. Now infrastructure could be the next arena. But its unclear how far France will go.

It’s one thing to try to ensure that consumers have an acceptable connection to support online video, through implementing some kind of standards. It’s another to get between participants in peering disputes, and to possibly start setting rates.

The U.S. fight is bigger than France’s

But such fights are becoming more common as the stakes over the internet and web video get higher. ISPs are worried about the cost of delivering video traffic over their networks, while also losing out on the ability to charge users for pay TV packages that significantly boost their revenue. Meanwhile, consumers are demanding more video online because they can choose what to watch, when they want to watch it, on any device.

The French competition authority’s earlier investigation referred only to two individual companies at loggerheads in a specific peering fight. But the new inquiry by the communications regulator is much wider, looking at industry-wide practices around infrastructure and interconnection. And it comes following consumer outcry — identified in UFC Que Choisir’s survey — to which politicians may be keen to respond.

The outcome will be important because Google is already facing having to pay to re-use news content in some parts of Europe through both commercial agreements and possible new legislation that suggest excerpting is chargeable. That could set new precedents for the online content economy.

The French broadband outcome will be important because it will set up a precedent for other telecom regulators who are struggling with similar issues. Creating standards to ensure that customers have a quality online video experience is no simple task and may well require investment by ISPs, especially those on older technologies or oversubscribed networks.

As for the peering issues, if the government decides to step into the fray there, it could be setting the internet up for regulations that put governments in the role of determining who can connect to whom and how much they can charge. The OECD recently made a convincing argument that such regulations and government involvement would hurt the web and the economic development of companies dependent on the web. So what France does here might have influence far beyond its borders.

As news guru Ken Doctor notes in a Nieman blog post, the LA Times and Chicago Tribune are set to come on the block in 2013. Meanwhile, there are reliable rumors that the venerable Financial Times and part of The Economist will be shopped early next year too.

While news of the sales have been around for a while, they are made more interesting by Doctor’s prediction that regulators could relax cross-ownership rules that limit how many TV and newspaper properties a media titan can own in the same market. Here’s the key upshot from Doctor:

Today, though, most of the reporting power, much of the brand power, and the political power still resides in big companies and their leadership. We may well get our strongest display of that early in 2013: In Washington, the FCC cross-ownership debate may move to center stage in January.

It’s a pretty safe bet that the coming newspaper sales are beyond the reach of people not named Buffett, Bloomberg or Murdoch. More interesting will be five years from now — to see if the titles are still around and if, by then, companies like Twitter, Google or Facebook have media mogul aspirations of their own.

(Image by Everett Collection via Shutterstock)

Users who are so inclined can use a special web form to notify YouTube about videos without captions. The site will then notify the publisher about the complaint, and forward any answer to the user. YouTube does warn users that the abuse of the form can result in the termination of their account, and a spokesperson wasn’t able to tell me whether complaints will actually lead to any tangible action against non-complying publishers.

It’s the law

This kind of procedure is YouTube’s response to the Twenty-First Century Communications and Video Accessibility Act of 2010, which was signed into law by President Obama in October of 2010, as well as some mandates put in place by the FCC earlier this year. Both force video sites to display captions for any video content that has previously aired on TV, as long as it hasn’t been substantially edited for online use. In other words: A whole segment of the evening news has to have subtitles, a online-only highlights reel doesn’t.

YouTube isn’t the only one scrambling to make sure that the content it hosts is compliant with the new rules. Amazon started adding closed captions to some of its Instant streaming content this week, and both Hulu and Netflix have been working for a while on adding captions to the videos they’re hosting.

In dealing with these issues, the companies find themselves often in a weird bind: The provisions that came into effect last week treat them as distributors, and put the burden on programmers to actually provide them with captions in the first place. However, some of that content simply doesn’t come with captions. Other videos aren’t covered by the same rules because they never aired on TV, or didn’t air in the U.S – but viewers obviously expect a consistent experience.

Most video sites are working on captions

That’s why most of the major players have invested significant resources into their own captioning efforts. YouTube added automatic captioning to its videos three years ago, and has since made it easier for publishers to add captions to their clips.

Netflix recently started to work with the captioning provider Amara to experiment with a crowd-sourced approach that would allow the company to add more captions to its videos more quickly. And Hulu has a number of its employees working on adding captions to its videos and improve existing captions.

Of course, these efforts aren’t entirely altruistic. YouTube, Hulu, Amazon and Netflix have to comply with the FCC’s mandate, and they’ve been under pressure from disability advocates to go even further. The National Association of the Deaf sued Netflix for not providing captions for part of its catalog last year, and sites like CNN.com have faced legal action over the issue as well.

The cable provider was ordered by the agency to provide access to “a reasonably priced broadband option to consumers who do not receive their cable service from the company” under the Commission’s Order approving the Comcast-NBCU transaction in 2010. To further show its ire with Comcast, the FCC also said Comcast would have to provide the stand-alone reasonable broadband-only package for another year — until February 21, 2015.

As part of Comcast’s 2011 agreement to buy NBC Universal the FCC tacked on several conditions that ranged from not prioritizing Comcast or NBC traffic over other packets on the Comcast network, to requirements that Comcast allocate channels for minorities. Comcast has touted its success including a new channel from Sean “Diddy” Combs, but entities ranging from individual technologies to Michael Bloomberg have complained.

In this case the FCC investigated complaints that alleged Comcast was hiding its “Performance Starter” service from customers. From the FCC release:

Under the order the Commission required Comcast to offer standalone broadband services on terms equivalent to packages that bundle broadband and video cable service. Comcast was ordered to offer a broadband service with a download speed of at least 6 mbps at a price no greater than $49.95 for three years. The Commission also prohibited Comcast from raising prices on the required broadband service for two years. Finally, Comcast had to “visibly offer and actively market” standalone broadband Internet access service to highlight the availability of this special service and other standalone broadband services.

Comcast didn’t admit fault as part of the settlement, but it did lay out some cash and pledge to make its cheaper stand-alone service more visible. It will train its call agents, make sure the offering is visible on its web site and it committed to a major marketing campaign around the Performance Started service for 2013. Ironically this comes at a time when Verizon is pulling back on offering stand-alone DSL.

However, the actions taken by the FCC may help convince folks like Senator Al Franken who wrote the DoJ and FCC a letter claiming that the agencies were letting Comcast run roughshod over its conditions. This move is one small step toward showing that the FCC isn’t some toothless regulator beholden to the very industry it regulates.

Update: Here’s Comcast’s response:

“Comcast has incorporated the extensive commitments and conditions from the NBCUniversal transaction into the DNA of our business practices, including the commitment to offer standalone broadband Internet. We are proud of our standalone broadband offering of ‘Performance Starter’ service – we rolled this product out in just one month, the fastest Comcast has ever deployed a brand new service simultaneously throughout its footprint.

As is often the case with services associated with government orders, the FCC had questions on how the service might have been rolled out in a different or even better way. We are pleased that Comcast and the FCC were able to address such issues cooperatively and constructively in a consensual manner. We look forward to continuing to offer and market Performance Starter in additional ways and with additional outlets. We believe this product offers a choice consumers want in the marketplace.”

In a unanimous ruling, the court declined to take up larger First Amendment questions about the degree to which swearing and nudity are protected speech. Instead, the justices found that the federal regulator had used overly vague guidelines to sanction Fox and ABC news and failed to give the broadcasters adequate notice about the rules.

In the case of Fox, the decision turned on so-called “fleeting expletives” such as when celebrity Nicole Richie make the unscripted remark  “Have you ever tried to get cow s*** out of a Prada purse? It’s not so f***ing simple” during an award show. The FCC warned Fox but did not fine the station but it did levy a fine on ABC News for showing an actress’ bare bottom for seven seconds.

The Court concluded that, since it could throw out FCC’s swearing and nudity decisions on vagueness grounds, it did not have to take up the First Amendment questions.

The question of swearing, free speech and broadcasting remains informed by a 1978 Supreme Court decision involving comedian George Carlin’s “Filthy Words” monologue.

In an odd pairing, liberal Justice Ruth Ginsburg and conservative Justice Clarence Thomas added a one paragraph concurring opinion arguing that the Carlin case was out of date due to “time” and “technological advances” and should be reconsidered.

To learn more about the fleeting executives case, see our earlier Q & A.

The investigation likely arose not just because of the issues surrounding access to cable over devices and data caps, but also due to a realization by the Justice Department that if the cable companies sell their spectrum to Verizon and eliminate Verizon as a wireline broadband competitor, the cable industry becomes the nation’s most advanced source of last-mile broadband. And since the DoJ is in the course of deciding whether the spectrum deal is anti-competitive, perhaps it realized that it had better understand a bit more about how cable is influencing and directing the future of television by virtue of its control over broadband.

The WSJ article cites sources at video providers such as Netflix who say that the DoJ has been asking questions over issues like data caps and deals that cable providers sign with content companies. It also looking at authentication, the process by which TV services ask viewers for a cable subscription before showing them content. My own sources have confirmed the DoJ’s interest.

Where’s there’s smoke, there’s a fire.

Worries that services like Hulu Plus might require a cable subscription could be a reason for the probe.

The rise in authentication is troubling, because it prevents customers who want to subscribe to alternative forms of content from being able to do so without buying a full-on cable package. For example, when the Olympics are broadcast this Summer, customers who want to see all of the events as they happen in real time will have to have a cable subscription, while those without will have to make do with broadcast.

The issue of broadband caps is harder for most customers to grasp because they aren’t faced with authentication screens, but are instead going to have to think about the potential of hitting a broadband cap after using too much data each month. And since caps are often high enough for most people to avoid, while still forcing them to think about their streaming, it’s for now a pretty mild deterrent. FCC Chairman Julius Genachowski has said that the broadband cap issue isn’t one that’s he’s concerned with, but it’s one we at GigaOM have watched closely.

There are two potential issues with caps. One is that it undercuts the idea of unlimited wireline broadband for consumers and thus acts as a deterrent on innovation, and two is that it serves to protect the video offerings of many providers. An hour of video can consume between 1 gigabyte and 2 gigabytes depending on the length and screen resolution of the content. For families that stream a lot of video, hitting the old Comcast cap of 250 GB per month isn’t impossible. And even though Comcast recently raised the cap to 300 GB per month, it’s still creating a ceiling that consumers could conceivably hit if they watch a lot of video.

Who gets to avoid the caps? That’s the question.

Comcast is at the heart of another data cap issue — namely what should regulators do when a cable provider lets some content avoid its caps. Comcast recently announced that it’s Xfinity on demand service would be available through the Xbox, but that content streamed only from that particular device wouldn’t count against its cap. Following that news, others reported that Comcast was prioritizing its own traffic that was served through the Xbox even when the quality of rival services such as Netflix suffered.

There’s a technical explanation for this that isn’t as nefarious as it might seem, but this doesn’t change the fact that the DoJ should nonetheless ask how Comcast chooses the vendors who can offer service that doesn’t count against the cap. The risk is that alternatives to cable video, which can cost consumers roughly $86 a month, will be stymied because cable providers like Comcast have the market and infrastructure advantage to keep rivals from delivering online video.

And that in a nutshell is what’s occurring. The Department of Justice should be asking about this, not because a consumer may not want to pay for cable and still wants to Watch Game of Thrones on demand, but because an entire market is undergoing disruption because of the Internet, and cable providers are trying to use their dominant position to halt that innovation.

For anyone out there lucky enough not to have received one, spam texts are unwanted ads or scam promotions sent directly to your cell phone. It feels as intrusive as a stranger in your bathroom. Bloomberg reports that the volume of these messages soared 45 percent last year.

The problem is not the just invasive nature of the text but that many users also face the indignity of paying for those intrusions. Unless a user has an unlimited texting plan, she may have to pay 20 cents for every inane, unwanted text message that hits her cell phone.

And therein lies the rub. Today, free messaging services like Kik or WhatsApp mean many users may not want to pay for a text plan at all. But the requirement to pay for incoming messages means that people may feel compelled to buy the carrier plans as a form of spam insurance. Worse, the phone carriers have jacked texting plans from $5 to $20 — all this for tiny bits of data that cost virtually nothing to transport.

The Federal Trade Commission is trying to get on top of the problem and, according to Bloomberg, has prosecuted a handful of spam senders. But ironically, it’s legitimate companies like Timberland and Jiffy Lube who have paid the most in penalties — these companies are easy prey for class action lawyers who wait for them to bungle a marketing campaign and then sue for millions under the Telemarketing and Telephone Consumer Protection Act (TCPA). Companies like Twilio that offer “club-texting” services are also facing class actions.

Meanwhile, Bloomberg reports the wireless industry is looking into acquiring anti-spam services like San Francisco based Cloudmark. The industry is also grousing about the costs of investigating consumer spam complaints.

The text spam problem is real but consumers should not be in the position of paying for these privacy invasions. The FCC should force the carriers to cease charging for incoming messages until the spam menace is solved.

The reported 4.5 billion text spam messages were among the 2.3 trillion sent overall last year.

Image courtesy of Shutterstock user [Lukiyanova Natalia / frenta].

More Sandvine research shows that half of what users access online is video content.

Sandvine, a company that makes deep packet inspection gear for service providers (its gear was used by Comcastback when it was caught blocking P2P traffic), has put out a snapshot of the traffic flowing across the global Internet in September 2011. Other than the rise of video consumption and the loss of social networking from the top 5 traffic drivers on the download side, the big story here is how to adapt our networks for video usage.

Half of our Internet use is related to video according to Sandvine's latest data.

Sandvine’s report points out one of the problems with video traffic; namely that it can expand to fill the capacity allotted to it. When capacity is scarce, the quality of video drops from HD to SD or is downscaled, but when congestion clears, the video service will start sending more packets to bump up the quality. This is good for consumers, but it can fill a network, and make it hard for operators to deliver a consistent experience for video and on networks where subscribers use a lot of video. Technical solutions such as adaptive bit-rate streaming or buffering content to a hard drive help. But Sandvine concludes that basic monthly usage caps, such as the ones ISPs are implementing, don’t.

From the report:

Monthly usage quotas have only a limited impact, if any at all, on peak network demand; however, quotas that differentiate between peak and off-peak might have a larger impact. If users had 200 GB per month to use at peak, but unlimited usage at other times, then they would be more inclined to change their behaviors. As an added benefit, the user would perceive a higher value of service (again, if ‘value’ is directly associated with data consumption) due to increased overall usage, without the network operator incurring additional cost to deliver the off-peak bytes. Higher subscriber value and flat operator costs? Sounds like a classic win-win.

Which then leads back to one of the questions that wasn’t asked yesterday at the Senate hearing on the future of TV. Are caps a worrisome protectionist tool to keep subscribers locked to both broadband and pay TV subscriptions? And if that’s a yes, then what should the FCC, Department of Justice or Congress do about it?

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This article originally appeared in GigaOm.