Senate Gives Comcast-Time Warner Cable Deal the Kid Gloves Treatment

Only Sen. Franken opposes merger

Comcast evp David Cohen had it pretty easy before the Senate Judiciary Committee’s hearing on the company’s $45 billion merger with Time Warner Cable.

In answering questions from lawmakers, Cohen rarely deviated from the company’s pitch that its merger with the nation’s No. 2 cable operator would give it the scale it needed to compete with companies like Google, Facebook, AT&T and Verizon.

It’s not that the Senators didn’t have “concerns.” The stats that will define the combined company’s unmatched size, 19 of the top 20 markets, 23 of the top 25, and 37 of the top 50, give lawmakers pause. They expressed plenty of skepticism that the merger of the two largest cable companies (which together would control 40 percent of the broadband market) wouldn’t ultimately leave consumers holding the bill. They even struggled to understand whether or not the combined company would dominate advertising sales.

But they stopped short of opposing the merger, calling on the Federal Communications Commission and Department of Justice “to consider carefully the impact on consumers as they review the pending merger,” said judiciary chairman Patrick Leahy (D-Vt.)

To no one’s surprise, only Sen. Al Franken (D-Minn.), who has been in high dudgeon since Comcast and Time Warner Cable announced the deal in February, vehemently opposed it. “I’m against this deal. I believe this deal will result in fewer choices, higher prices. Comcast says there is no overlapping footprint, but it wants to control the national market,” Franken said. “As it gets bigger, it will have more power to squeeze consumers.”

Franken, who also opposed Comcast’s merger with NBCU three years ago, said that Comcast is trying to have it both ways.

“During the NBCU deal, we were told by the Comcast CEO that we shouldn’t worry about the deal because it competed with other distributors like Time Warner Cable. Now they turn around three years later and say the absence of competition with Time Warner Cable is the reason to approve this deal,” Franken said.

The plight of independent programmers also got some attention from Senators who seemed sympathetic to Back9Network, a 24/7 Internet channel that has had a tough time getting distribution on either Comcast or Time Warner Cable. Without the top two, Back9Network has had trouble attracting advertisers.

Comcast’s Cohen agreed that it was tough for any new network to get carriage. “We are the most independent programmer-friendly cable company with 160 independent programmers,” Cohen said. “We are talking to Back9. If consumers want to watch content, we will carry it.”

Going back to one of the conditions the FCC imposed on Comcast in the NBCU review that Comcast must place news networks in neighborhoods, Franken questioned whether Comcast complied when the FCC ordered it to place Bloomberg News in a news neighborhood.

“It’s an interpretation issue, not a compliance issue,” Cohen said.

Surprisingly, the Senators spent very little time on broadband, though Leahy asked about net neutrality.

“We will be doing net neutrality beyond 2018 because the FCC is working hard on it, and I can’t imagine the rules wouldn’t be in place by then,” Cohen said.

Except for Franken, Senators left with more to think about and more than 175 pages of Comcast’s filing to read.

“There are a lot of very important issues here affecting consumers and independent programmers. It’s also about the pricing and what that does to the market, whether it’s advertising or wholesale pricing,” said Sen. Amy Klobuchar (D-Minn.). “And making sure the Internet is done in a fair way and is available to everyone.”