Comcast-NBC Universal Deal Raising Questions on Hill

Four congressional bodies will study the Comcast-NBC deal. The House Communications Subcommittee and the Senate Antitrust Subcommittee both plan hearings Feb. 4. The House hearing, to be held in the morning, will involve Comcast CEO Brian Roberts and NBC Universal CEO Jeff Zucker, Boucher said. The Senate Antitrust Subcommittee has also invited the executives to its afternoon hearing (CD Jan 21 p13). The House Judiciary and Senate Commerce committees also have jurisdiction over the merger, but they haven’t announced hearings. The Senate Commerce hearing may not happen until a month after the first two hearings, and it may look more generally at video competition, said a Hill source.

Congress’ role in mergers is to raise awareness of possible issues, said a Hill source. For example, members may send a letter with recommendations to the Department of Justice and the FCC, the source said, saying that usually happens about two months after hearings. Congress can use its bully-pulpit power to push agencies, and if it’s “really unhappy” with a deal can threaten legislation on particular issues, said Legal Director Harold Feld of Public Knowledge. Justice and the FCC don’t always follow the Hill’s recommendations. Members of Congress expressed opposition to the EchoStar-DirecTV and the XM-Sirius deals. The satellite TV merger fell through, but the radio deal took place.

By questioning the companies’ executives at hearings, “we serve as useful proxies for the public in highlighting what may be issues of concern [and] highlighting public benefits that can flow from the company,” Boucher said. That “serves not only the interest of the public, but also the interest of the two companies themselves.” Congress doesn’t have direct authority to approve or reject the deal. But commentary from the hearings probably will be considered by the FCC and Justice Department, he said.

Boucher wouldn’t preview any specific questions for the companies, but said “members are going to be interested in the extent to which there is assurance that the acquisition of an entertainment company by Comcast does not in any way restrict the availability of entertainment content for distribution among Comcast’s competitors.” But “to some extent, existing law prevents that from happening,” he said. And based on private conversations with Roberts, Boucher said, he’s “confident” that’s not Comcast’s intention.

Some members believe the Comcast-NBC merger could fuel similar deals between service providers and programmers, said Hill sources. Themes of questioning are likely to include the deal’s effects on Comcast’s competitors and on program producers that want to get on its platform, and what it means for Internet video services like Hulu, partly owned by NBC, Hill sources said. A source said to expect an emphasis on the deal’s effects on consumers, including on their bills. What the deal means for retransmission consent agreements probably will be a hot issue, Feld said.

Boucher said he hasn’t been lobbied much on the merger, except for a call from Comcast seeking to set up a private meeting with Roberts. The two have talked over the phone and for about an hour in the congressman’s office, Boucher said. Other Hill sources also said there had been little lobbying activity recently, after a big push by Comcast and NBC immediately when the deal was announced.

Lobbying should heat up closer to the hearings, said Vice President Ross Lieberman of the American Cable Association. The association wants to make Congress aware of potential harm to competitors and consumers, he said. The cable group and representatives of the satellite industry, small telcos, writers guilds and public interest groups raised concerns about the deal in a letter this month to legislators and President Barack Obama (CD Jan 8 p6).

Spectrum, USF Top Boucher Goals

Boucher said his legislative priorities include requiring a wireless spectrum inventory (CD Jan 22 p2), overhauling the Universal Service Fund and strengthening Internet users’ privacy protections. He said he also plans oversight hearings on the $7.2 billion broadband stimulus program and the FCC’s National Broadband Plan.

The lawmaker doesn’t expect the FCC to ask for another extension for the National Broadband Plan, and he said he thinks that “they had good reason to ask for the first one.” The FCC received many more comments for the plan than anyone could have expected, he said. “It’s important for them to do a thorough job” and “analyze the public commentary,” he said. “Rushing this to us by February if it is in an incomplete state will not serve anyone’s interests.”

Boucher said his USF bill with Rep. Lee Terry, R-Neb., will comprehensively revamp the fund to control costs and expand the revenue base. “The status quo is not sustainable.” The bill has support from both the big companies that contribute the most to the fund and the rural companies that receive the most, he said. The Communications Subcommittee had a hearing in November. “We hope to move this measure very shortly through the subcommittee and through the full committee and the House.”

There’s no “inconsistency between what we are promoting in our legislation and what the commission is considering in terms of the place of the Universal Service Fund within the National Broadband Plan,” said Boucher, adding he agrees that USF must be transformed to support broadband. His bill would allow USF to support broadband, and it would require recipients to offer broadband throughout their service territories within five years to keep support, he said. But the bill would leave the related issue of intercarrier compensation to the FCC, he said.

Meanwhile, Boucher said, he’s working with Subcommittee Ranking Member Cliff Stearns, Fla., on privacy legislation for Internet users. Companies collecting user information would need to state what they're gathering and how it will be used, he said. “We hope to have a discussion draft available for circulation shortly” and take comment, he said. Then it will move to a hearing and markup, he said.

Boucher is also “developing the concepts” for a bill to set national consumer protection standards for wireless users, he said. He declined to give specifics, but said it “would be a meaningful set of national standards that would then preempt inconsistent state standards.” The current “patchwork” of state standards has been a burden for wireless carriers that has increased costs for consumers, he said.

Boucher expects Congress to pass satellite TV reauthorization legislation by the deadline at the end of next month, he said. “We are working behind the scenes with members of the Senate” on a unified version of the two chambers’ bills and aim to pass it before March, he said. “Finding the right vehicle is always the challenge for these matters, but we'll find one.”