Updated: Comcast-NBCU Hearings in Full Swing

The House hearing on the $30 billion Comcast-NBC Universal deal turned out to be just a warmup for a much more lively debate on the Senate side. While Brian Roberts, chairman and CEO of Comcast and Jeff Zucker, president and CEO of NBC Universal, said all the right things, legislators were skeptical.

Proposed two months ago, the deal between the nation’s largest cable company and the fourth-largest media company is unprecedented in its combination of distribution and content. In separate hearings before the House Energy and Commerce Subcommittee and the Senate Subcommittee on Antitrust, Competition Policy and Consumers, Thursday (Feb. 4) the focus was clearly on the impact of the deal on the consumer.

While most believe the deal will be approved by The Federal Communications Commission and the Department of Justice, the question is whether those agencies should put conditions on the deal.

“Should the agencies decide to allow this merger, we believe it is essential that they insist on strong conditions to protect consumers,” said Sen. Herb Kohl (D-Wisc.) and chairman of the Antitrust, Competition Policy and Consumer Rights Subcommittee of the Senate Judiciary Committee. “Comcast has already pledged to adhere to a number of commitments with respect to this merger. We appreciate that effort, however, those commitments are only a starting point to determine what conditions will be necessary to protect consumers.”

Ahead of the hearings, Comcast made several commitments to invest in free over-the-air broadcasting, maintain the network-affiliate TV model and abide by program access rules, among others. Roberts reiterated those promises Thursday.

Sen. Al Franken (D-Minn.), who reminded the hearing that he had worked for NBC, wasn’t buying it. “I commend the voluntary commitments, but I don’t trust these promises,” he said. “I remember what happened with [the financial syndication rules]. You guys said ‘we are in the business of ratings, why would we favor our own programs.’ Those promises weren’t kept.”

Franken’s hard line with Roberts and Zucker was supported by Mark Cooper, director of research for the Consumer Federation of America and Andrew Schwartzman, president and CEO of the Media Access Project. Since the deal was proposed two months ago, public interest groups have been working over time to oppose the deal, claiming it will stifle competition and harm consumers by limiting programming choices and raising prices.

“If we want to give consumers real choice, let’s give them a la carte,” said Cooper.
NBC affiliates also weighed in during the House hearing. Despite Comcast’s vows to preserve free over-the-air broadcasting and the network affiliate TV model, Michael Fiorile—chair of the NBC affiliates board and president and chief operating officer of the Dispatch Printing Co.—wanted more. “It’s a positive start, but it’s just a start. We want to agree on clear and enforceable conditions,” he said.

Comcast is just what broadcasting needs, said Zucker, who painted a picture of Comcast as the white knight that will rescue the struggling broadcasting business. “This merger gives me greater comfort about the future of broadcasting,” he said.

Comcast’s competitors expressed concerns that the price of programming will go up. “The combined company will have strong incentives to increase our costs,” said Colleen Abdoulah, president and CEO of WOW!, a small cable company serving 1 million homes that competes with Comcast. “I’m not here to whine. I ask for a remedy structure. The current retransmission consent procedures and outside arbitration don’t help us. They are time consuming and don’t ensure continued carriage while in negotiation. Regulators must impose different and better remedies.”

Though DISH Network didn’t testify at the hearings, it, too, raised concerns in a letter to several Congressional leaders.