But critics argue the deals will strangle access to online video and kill competition
The Senate Commerce Committee held a wide-ranging hearing Wednesday on the future of online video transmission, consumer choice and consolidation among pay TV and broadband providers.
Among the witnesses were David Cohen, Comcast’s executive vice president, and John Stankey, AT&T’s group president and chief strategy officer.
The two business execs argued that consolidation in the telecom industry is good for consumers and innovation. They also insisted that mega-mergers would not hurt online video providers, and would in fact be good for consumers.
“Video competition is strong and it is increasing,” Stankey said. “It has never been easier for consumers to access the video they want when and how they want it.”
He added that AT&T’s proposed $49 billion merger with DirecTV would allow the combined company to better compete with cable providers.
Cohen said Comcast’s proposed merger with Time Warner Cable would benefit consumers.
But “The Shield” creator Shawn Ryan, Dish Network senior vice president Jeffrey Blum, and Gene Kimmelman, president and CEO of consumer group Public Knowledge, offered a starkly different view.
They argued the deals will kill competition, tip the web away from being a viable alternative to cable and leave consumers with higher cable prices.
“The internet has given us new choices from outside the tightly controlled cable bundle,” said Ryan, speaking for the Writers Guild of America-West. “What began with ‘House of Cards’ is spreading. These represent meaningful change for writers and the public alike.”
He warned that the deals represent a new pushback, that could give the same six companies who currently control most cable content, control of web programs.
“Internet providers would be allowed to strangle innovation in the cradle,” he said in urging regulators to act.
Blum said a Comcast and Time Warner Cable combination would leave the company with 47 percent of the high speed broadband connections in the country and an incentive to thwart broadband services of its competitors.
He argued that a regulatory decision on the deal will determine “whether a few large companies will have ultimate control over what Americans watch and what they do.”
Kimmelman, a former Justice Department official, said the mergers were creating an “arms race” where first transmission companies, then content owners bulk up and consumer get squeezed.
Questioned by a senator, Cohen, declined to rule out further deals.
“It is impossible for me to say I would rule out any additional merger or acquisition strategy within the media and entertainment space,” he said, noting that 20th Century Fox had made an offer for Time Warner.
Committee Chairman Sen. Jay Rockefeller (D-W.Va.) was among the senators expressing some concern about the size of the deals.
“This is important beyond belief,” he said. “It’s about where Americans get their information, if they can get their information.”
Sen. Ed Markey (D-Mass.) said he was worried about cable prices.
“We don’t have real competition on price,” he said. “Consumers feel they are being turned upside down and the dollars shaken out of their pockets.”