Comcast Attacks Seen Unlikely to Affect Deal
Comcast’s attacks on programmers, Dish Network, Netflix and others in the reply comments filed in docket 14-57 and released Wednesday (CD Sept 25 p6) aren’t likely to have much effect on the eventual outcome of FCC review of Comcast/Time Warner Cable, said cable industry observers in interviews Thursday. Comcast and its opponents are both “posturing,” said Mediacom Group Vice President-Legal and Public Affairs Tom Larsen. Mediacom has not filed comments in the Comcast/TWC proceeding. FCC merger review teams are “more insulated” from comments and news reports and not likely to respond to “rhetoric,” said Free Press Policy Director Matt Wood. Free Press filed a petition to deny Comcast/TWC. Other entities appeared to take Comcast’s accusations more seriously -- public interest group Common Cause demanded an apology. “Comcast’s suggestion that we've offered to withdraw our opposition in return for favors from the company is absolutely unfounded and untrue,” said former FCC Commissioner Michael Copps in a news release (http://bit.ly/1BcVL3Q). Copps is special adviser to Common Cause’s Media and Democracy Reform Initiative.
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The FCC “has been doing this for a long time and is attuned to how the game is played,” said Guggenheim Partners analyst Paul Gallant. “I wouldn’t expect the behind the scenes discussions between the parties to affect what the FCC does.” The FCC is likely unsurprised that companies like Discovery Communications sought to renegotiate deals using the merger as leverage, Larsen said. “Any time there’s a major transaction, people go out and seek an improvement,” he said. “You see a harm and you try to get a condition or better business deal to ameliorate it.” Such companies have “a fiduciary duty” to their shareholders to try to use Comcast/TWC to their advantage, Larsen said. “It’s not surprising that Comcast’s business partners would try to use Comcast’s current vulnerability as an opportunity to extract beneficial business terms,” said MoffettNathanson analyst Craig Moffett. “What’s surprising is that Comcast called them out on it."
The reply comments focused on evidence intended to rebut the opposition claims of programmers, Netflix and others, a Comcast spokeswoman told us via email. “We put ample evidence in the record to show why those arguments should be rejected, not just on the merits, but on the fact they are not transaction specific evidenced by their filings in other dockets and complaints about their similar contracts with other companies."
Comcast said Common Cause’s request for an apology is based on a misunderstanding. Though Common Cause is lumped in with other consumer groups as spreading “well-worn ‘doom and gloom’ prophecies,” it is not included in the portion of the reply comments that attack other companies for their “asks,” said the Comcast spokeswoman. “If you read the reference to them in the document, you can see it in no way says what they claim.” Copps said Comcast was “trying to change the channel while quietly throwing around big money and influence in Washington.” Comcast has spent more than $3.7 million on federal campaign contributions and $26.5 million on federal lobbying during this election cycle, Common Cause said. Copps was the lone dissenting vote against Comcast buying control of NBCUniversal.
The American Cable Association attacked Comcast’s assertion in its reply comments that none of the petitioners had refuted the public interest benefits of Comcast/TWC. “While criticizing and dismissing its critics, Comcast refused to address directly the important public interest concerns raised by parties about the big cable deal’s harms to competition and consumers and the lack of remedies available to address these harms,” ACA said in a statement. Many of the public interest benefits lauded by Comcast aren’t real, and others don’t correct for the harms the deal would cause, said Free Press’s Wood. “Even if there is a net benefit, does it offset these competitive harms?"
The “arrogant tone and sense of entitlement” in Comcast’s reply comments could provide insight into how Comcast/TWC will treat consumers and competitors if the deal is approved, Dish said in a statement. “The facts and the law demonstrate that this merger should be denied. It is not a close call.” Entravision, which filed comments opposing the deal, said Comcast had not dedicated enough of its reply filing to how the deal would affect Latinos. “Rather than explain how Latino subscribers will be well-served by having a single provider offering cable television service to 90 percent of Latino households, Comcast chose to attack the messenger,” Entravision said.