Congress grills Comcast on merger with Time Warner Cable
David Cohen, executive vice president of Comcast, faced tough questions from the Senate Judiciary Committee about the $45 billion deal. But only one senator, Al Franken, said he wanted the merger blocked.
The New York Times
WASHINGTON — Members of the Senate Judiciary Committee expressed concern Wednesday that the $45 billion merger of Comcast and Time Warner Cable would raise the prices consumers pay for cable television and high-speed Internet service while leaving them with fewer choices for video programming.
But only one — Sen. Al Franken, D-Minn. — said during the three-hour hearing that he wanted the merger blocked, giving the hearing more the air of a strict lecture than an investigation.
Although Comcast Executive Vice President David Cohen played down the likelihood of higher prices for consumers, he also resisted an offer to amend his earlier statement that the company cannot promise cable and broadband prices will go down, or even increase less rapidly.
“I’m very careful what I commit to and what I promise,” Cohen told the committee. “There is nothing in this transaction that will cause anyone’s cable bills to go up.”
Cohen did acknowledge Comcast has a reputation for leaving its customers dissatisfied. “It bothers us that we have so much trouble delivering a high quality of service to customers on a regular basis,” Cohen said.
But it is trying to improve, he added, by hiring more service employees and improving training.
Those efforts “are beginning to bear fruit,” he said. “We’re deeply disappointed with where we are. But that will spur us to be even better. Sometimes we need a kick in the butt to focus.”
Comcast has been arguing that the proposed takeover would benefit consumers by generating greater investment and more competition among cable-television and broadband companies.
The deal has generally been supported by conservative lawmakers and opposed by Democrats, who fear that it will result in higher bills for consumers.
Sen. Patrick Leahy, D-Vt., chairman of the committee, said the impact of the merger on consumers was probably the most important consideration in determining whether the deal should go ahead.
“Consumers do not want to hear complex legal jargon or obscure regulatory terms,” Leahy said. “They want to know why their cable bills are going up. They want to know why they do not have more choice of providers. Consumers are trying to find out whether and how this merger is good for them. I want to find out the same things.”
Leahy said that in 1996, he voted against the Telecommunications Act “in part because of concerns I had about the lack of competition in the cable-TV market.”
“Along with many consumers, I continue to be concerned,” he added.
Cohen told the committee that the transaction “will give our company the scale that will enable us to make larger investments in R&D, innovation and infrastructure, so we can compete more effectively in this incredibly dynamic marketplace.”
The company has been busy briefing lawmakers and their staffs, particularly from the Senate Judiciary Committee. Comcast also recently added to its lobbyists two former legislative aides who advised the Judiciary Committee on antitrust matters.
Critics, too, are gearing up for a fight.
A leading critic of the deal is Public Knowledge, a nonprofit group funded in part by donations from Google, DirecTV, Dish Network and other Comcast rivals. It has hired SKDKnickerbocker, a prominent public-relations firm led by Anita Dunn, a former White House communications director, and Hilary Rosen, a Democratic strategist and former lobbyist.
The maneuvers by both sides portend months of wrangling.
The Justice Department’s Antitrust Division and the Federal Communications Commission have begun their inquiries into the merger, which would join the two largest cable-television and broadband companies. The Justice Department is charged with deciding whether the deal violates antitrust laws, while the FCC will seek to determine if the transaction is in “the public interest.”
Regulators are likely to focus as much on how the merger will affect the market for high-speed Internet, also known as broadband, as how it will affect cable-TV service.
Comcast filed its public-interest statement with the commission Tuesday, saying a merger of the two largest cable-television companies would spur rather than inhibit competition by encouraging rivals to improve their cable and high-speed Internet service.
But the merger would create a behemoth, controlling 30 percent of the nation’s cable subscribers and more than 40 percent of the market for high-speed Internet service.