Bidding has begun on Comcast’s acquisition of a majority stake in NBC Universal. No, not the bidding between GE and Comcast over the terms of the sale. That was the comparatively easy part. The real bidding is over at the FCC, as various interests work to get concessions and pledges from Comcast as a condition of FCC approval of the deal. The jostling may put post-Thanksgiving Black Friday sales to shame. Everything from more kid’s shows to broadband open access mandates are potentially on the table.

And that’s if the sale is approved by the FCC at all. Groups such as Free Press called for its rejection as soon as it was announced. Commissioner Michael Copps underscored the alpine nature of the approval process, stating bluntly that the deal “faces a very steep climb with me.”

Amidst the din, however, one question has been drowned out: Why is the FCC involved in this at all?

It’s not an idle question. The FCC does not, and never has, had general authority to approve or deny mergers in the media world. In fact, major major deals — such as News Corporation’s purchase of the Wall Street Journal — didn’t involve the FCC at all (to Mr. Copps’ dismay.)

The FCC’s hook into such deals is in fact quite narrow: the transfer of spectrum licenses. And such transfers are a surprisingly small aspect of the deal. None of the key assets being purchased, Universal Studios, MSNBC or the other cable channels, or even the NBC network itself, is FCC-licensed (though some units may hold stray licenses for ancillary purposes).

In fact, the only significant licenses among NBC’ Universal’s assets may be the broadcast licenses held by NBC’s 10 owned-and-operated local stations. And these are hardly the crown jewels of the transaction. While Comcast may value the content provided by Universal or CNBC, why would it want broadcast stations? After investing billions in a digital cable network, what earthly use does it have for towers and antennas? It would be like American Airlines buying a stagecoach line to supplement its transportation network.

Yet, based on this thin reed, the FCC has gained approval authority over the entire NBC Universal transaction. It is of course, not the only agency that must approve — the the Federal Trade Commission or Department of Justice must also review it (which of the two is still to be decided). These agencies are not pushovers, and their OK should be sufficient to answer any concerns about harm to competition from the deal.

It would be bad enough if the FCC merely duplicated the FTC or DOJ reviews. The additional delays alone could kill many deals — famously, it took the Commission 505 days to approve the merger of Sirius and XM Radio. But the harm goes beyond that. Unlike the antitrust authorities, who base their review upon established law, the FCC uses a free-roaming and undefined “public interest” test. As a result, the FCC’s reviews are largely unconstrained, and approval or rejection can be based upon virtually any factor that three of five commissioners find to be plausible. The result is a highly unpredictable, and political, process in which anybody can propose their own wish list of conditions and rationales.

It makes one wonder why Comcast didn’t just say “no thank you” to the local broadcast albatrosses. But the bigger problem is with the law that gives the FCC such unneccessary and unconstrained power in the first place. Its unlikely for the moment, however, that Congress will be inclined to take away that power, or that the FCC will not use it. So it looks like the bidding will continue.

Stay tuned.

Cross-posted at Technology Liberation Front