Philadelphia-based Comcast has achieved what some have referred to as “the holy grail” of the entertainment business: the union of a vast broadband distribution network with a rich stable of content and talent. The last time any company tried to do something on this scale was AOL Time Warner, a deal that was, shall we say, ahead of its time.

Over the last year, critics of media consolidation have vigorously protested the deal, saying it would concentrate too much market power in the hands of one company and lead to higher prices for consumers.

But after applying conditions to the deal and extracting voluntary commitments from Comcast, the FCC has concluded that the transaction serves “the public interest,” which is the criteria the deal must meet to gain FCC approval.

“The conditions include carefully considered steps to ensure that competition drives innovation in the emerging online video marketplace,” FCC Chairman Julius Genachowski said in a statement. “Our approval is also structured to spur broadband adoption among underserved communities; to increase broadband access to schools and libraries; and to increase news coverage, children’s television, and Spanish-language programming.”

The vote was 4-1 in favor. Michael Copps, a Democratic commissioner, was the lone dissenter.

“Comcast’s acquisition of NBC Universal is a transaction like no other that has come before this Commission—ever,” Copps said in a statement. “It reaches into virtually every corner of our media and digital landscapes and will affect every citizen in the land. It is new media as well as old; it is news and information as well as sports and entertainment; it is distribution as well as content. And it confers too much power in one company’s hands.”

Comcast, the nation’s largest cable television company and internet provider, has 23 million cable subscribers and 17 million broadband customers. NBC Universal, of course, owns the “Peacock Network.” It also owns 10 FCC-licensed NBC stations in major cities including New York, Chicago and Los Angeles, as well as the popular Spanish-language Telemundo network. And of course, there are the cable networks: USA, CNBC, MSNBC and Bravo. Throw in Universal Pictures and various theme parks, and you’re talking about some serious entertainment assets.

Among the conditions and commitments Comcast has made are to “increase local news coverage to viewers; expand children’s programming; enhance the diversity of programming available to Spanish-speaking viewers; offer broadband services to low-income Americans at reduced monthly prices; and provide high-speed broadband to schools, libraries and underserved communities, among other public benefits,” according to a FCC press release.

There was some controversy over Hulu, the popular free internet video site, which is partially owned by NBC Universal. Critics of the deal had warned that Comcast, after acquiring NBC Universal, might use its its power to stifle Hulu. In a eyebrow-raising policy maneuver, the FCC has said that Comcast can maintain its newly acquired ownership stake in Hulu, but cannot excersise “managerial control” over Hulu.

Comcast also has to make its content for sale, including that which it shows on its online portals such as Fancast. to other cable providers and online video providers at a fair price, according to the order. That limitation is intended to keep Comcast from strangling its competitors with high prices for its content.

Comcast also agreed to abide by the recent “net neutrality” rules passed by the FCC, which require the company not to block or slow down online video sites. Comcast agreed to follow those rules even if those rules are struck down by a federal court, which legal experts say is a real possibility.

Comcast will also have to offer customers the option to order internet service, without a cable TV bundle, for seven years. For the next three years, the price will be $50 for 6 Mbps upload speed in all of Comcast’s service areas.

Google TV fans, however, will find no help in getting NBC to stop blocking Google TV from letting people watch videos from its online sites on their television. FCC officials say that NBC remains free to block Google TV.

Critics of media consolidation savaged the deal and the FCC’s approval of it.

“Today’s decision by the FCC represents a failure of the agency to live up to its own public interest mandate, as well as Barack Obama’s promise to promote media diversity and prevent excessive media concentration,”  Josh Silver, President and CEO of Free Press, a D.C.-based advocacy group. “This deal will give Comcast unprecedented control over both media content and the physical network that delivers it.”

“The approval of this merger represents yet another failure of the Obama administration to live up to the president’s promises to protect against media consolidation and ensure access to a broad range of diverse sources of news and information,” Silver added. “Apparently, such promises aren’t worth much in the face of Comcast’s army of lobbyists, PR shops and generous campaign contributions. Today, Comcast has won the jackpot, and once again, it is the American people who will end up paying out.”

Authors: Sam Gustin

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