Comcast-TWC Deal Seen Facing Multiple Congressional Hearings

The Senate Judiciary Antitrust Subcommittee plans a hearing “to carefully scrutinize the details of this merger and its potential consequences for both consumers and competition,” said Chairwoman Amy Klobuchar, D-Minn., saying the merger could “have a significant impact on the cable industry and affect consumers across the country.”

"Vibrant competition in the cable industry ensures reasonable pricing and quality service for millions of cable subscribers,” said ranking member Mike Lee, R-Utah.

The House Judiciary Committee also plans a hearing, said Chairman Bob Goodlatte, R-Va., and Antitrust Subcommittee Chairman Spencer Bachus, R-Ala., in a joint statement. “The proposed merger between Comcast and Time Warner Cable could have a significant impact on competition in the video and broadband marketplace,” they said, pointing to what they called House Judiciary’s “robust and lengthy record of exercising its jurisdiction over our antitrust laws and competition.” The hearing will “examine the proposed merger to ensure that the interests of American consumers and overall competition in the marketplace are protected."

Members of Congress have typically exerted influence over such proposed mergers. In early 2010, both Senate Antitrust and the House Communications Subcommittee held hearings on the merger of Comcast and NBCUniversal.

Public Knowledge Vice President-Government Affairs Chris Lewis told us this scrutiny will be important “for the public to have an opportunity to really hear the arguments about the merger publicly,” with many concerns to be raised. “This does not bode well for competition for broadband Internet service.”

"Ultimately Congress doesn’t count,” Consumer Federation of America Research Director Mark Cooper told us. “The agencies are going to do what the agencies want to do. Congress can shout at them a lot.” Cooper testified before Congress multiple times in 2010 when Comcast acquired NBCUniversal. He expects a “humongous” fight, laden with many legitimate policy questions, he said. If Comcast expected to make an acquisition, it should have done a better job of complying with the conditions put in place from when it acquired NBCUniversal, he said. It’s too hard to say whether the government should just say no to the merger, Cooper said. The market is in poor condition but the right conditions may provide a better market, depending on what they are, he said.

"I have serious reservations about this proposed transaction, which would consolidate the largest and second largest cable providers in America,” Sen. Al Franken, D-Minn., told the FCC, Department of Justice and FTC in a letter Thursday (http://1.usa.gov/1evJZ8y). “I urge you to act quickly and decisively to ensure that consumers are not exposed to increased cable prices and decreased quality of service as a result of this transaction.”

Franken worries about cable rates and a diminished market and opposed the earlier merger between Comcast and NBCUniversal, he said. “Unfortunately, a handful of cable providers dominate the market, leaving consumers with little choice but to pay high bills for often unsatisfactory service,” Franken remarked. “I am concerned that Comcast’s proposed acquisition of Time Warner [Cable] would only make things worse for consumers."

All observers we canvassed cited Comcast’s intense lobbying power and connections in Washington as contributing to its advantage. “Their ability to touch folks on the Hill and at the agencies is unmatched,” Lewis said, mentioning the “sheer quantity of lobbyists they have.” Lewis expects more lobbying from industry and doesn’t doubt Comcast’s resources to do it, specifically citing Comcast Executive Vice President David Cohen as one of the most well-connected lobbyists in town. In November, President Barack Obama referred to Cohen and his wife as “such great friends” at a fundraising event (http://1.usa.gov/1bsI4am). “Money talks in America” but so do the antitrust laws, Cooper said. He pointed to the failure of AT&T to be allowed to acquire T-Mobile and the conditions placed on Comcast’s acquisition of NBCUniversal.

Comcast spent $18.71 million lobbying Congress in 2013, according to the four quarterly lobbying forms it filed. The cable company also pays a variety of lobbying firms hundreds of thousands of dollars to lobby for it. It most recently hired Holland & Knight, according to a registration form posted online this week. Holland’s lobbying began Jan. 1, with Paul Bock, a former chief of staff for former Senate Antitrust Chairman Herb Kohl, D-Wis., the one lobbyist named, the form said. Time Warner Cable spent $8.29 million in 2013, according to its company lobbying forms, not counting what it paid lobbying firms. In 2013, Time Warner Cable had 34 lobbyists representing it from within its company and outside firms, and Comcast had 107, according to the Center for Responsive Politics. NCTA, which includes Comcast and Time Warner Cable as members, is also known to be one of the biggest spenders on lobbying, dropping $6.6 million in 2013’s Q4 alone. NCTA spent $19.87 million in 2013 overall, not counting its many hired firms.

Franken is one of the few members who speaks more freely and critically on these issues, rebuffing the industry weight, one media industry lobbyist told us. The lobbyist pointed to Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., and Sens. Richard Blumenthal, D-Conn., and John McCain, R-Ariz., as other senators worth watching who have engaged in this space before. Rockefeller’s office declined comment on any potential hearing or about the merger.

"I rarely make predictions about Congress, but I feel certain in predicting that the merger will be an enormous distraction for lawmakers, consuming time that might otherwise have been spent productively on figuring out how to update the Communications Act, deal with the alarmingly sweeping power the [U.S. Court of Appeals for the] D.C. Circuit seems to have given the FCC under Section 706, or how to actually make broadband competition easier,” TechFreedom President Berin Szoka said. “Lawmakers will wring their hands over the merger, complain about consolidation, ask angsty questions, and it will not matter one bit to the review of the merger, which, as even Comcast’s critics like Susan Crawford seem to acknowledge, is unlikely to be stopped.” Crawford is a law professor, former Obama adviser and author on telecom issues.