Comcast-TWC Deal Criticized and Praised During House Panel Hearing

Comcast Time Warner Cable

“It could give the merged company enormous sway over the kind of content that is available to the public.” — Rep. John Conyers

Congressmen on Thursday were warned that Comcast’s purchase of Time Warner Cable “is a big deal that threatens consumers and competition.” They also were told the deal would benefit consumers.

During a more than four-hour hearing, a panel of the House Judiciary Committee federal regulators heard sharply different views of the deal. The panel was urged to kill the deal outright because of the extent of competitive issues raised while pro-merger types predictably said that the deal doesn’t cause competitive issues at all.

There was also a suggestion from one congressman, Rep. Louie Gohmert, R-Texas, that Comcast has a political agenda of keeping Glenn Beck off cable. Gohmert said Comcast is refusing to confirm if it will continue airing the RL TV channel if Beck’s media company buys it. A Comcast official said RL TV is aired as an entertainment channel, not a news channel, and denied any attempt to keep Beck off the air.

Also read: Earnings: Comcast Beats Expectations With Help From Sochi Games

Concerns about Comcast’s deal came both from witnesses and congressmen.

“The sheer size and scope of the merger have raised concerns,” said Rep. John Conyers, Jr., D-Mich, the ranking Democrat on the full Judiciary Committee. “Being unable to distribute on Comcast could potentially be fatal to non-affiliated programmers. Ultimately it could give the merged company enormous sway over the kind of content that is available to the public.”

Matt Polka, CEO of the American Cable Association, issued the “big deal” warning and said the combination creates three different sets of potential problems.

He pointed to the added clout NBCU’s TV stations would give Comcast in negotiating with rival carriers in TWC areas; additional issues caused by the combination of Comcast and TWC’s sports networks into a single company; and new competition issues raised by the combined companies having 30 percent of cable subscribers and a higher level of broadband subscribers.

Also read: Comcast Blasts Netflix Over Opposition to Time Warner Cable Merger

Polka warned that Comcast would have the incentive and the means to disadvantage rival cable systems and providers of internet content.

“In the short run, it will demand larger discounts than its rivals, weakening the rivals,” he said. “In the long run, it may use its leverage to increase its dominance in the programming industry.”

Allen P. Grunes, an antitrust lawyer, said there is little doubt the deal violates anti-trust law.

“The merger is likely illegal,” Grunes said, suggesting the deal and possible broadband dominance would give Comcast and TWC too much influence in the marketplace.

Also read: Comcast-Time Warner Cable Deal Despised More Than Ever by Consumer Groups, Writers’ Guild

On the other side of the argument, the committee heard the deal will cause few problems because Comcast and TWC’s cable systems don’t overlap.

Rep. Darryl Issa, R-Calif., said he had more concerns about the process the Federal Communications Commission was using to review the deal than the deal itself.

Several other congressmen questioned whether the deal would significantly impact competition. And officials of Comcast and TWC repeatedly defended the deal as benefiting consumers.

“This transaction will give us the scale to invest more in innovation and infrastructure so we can compete more effectively with our mostly larger national and global competitors including Bell, DirectTV, Dish, Apple and Google to name a few,” said David L. Cohen, Comcast’s executive VP.

Robert D. Marcus, chairman-CEO of TWC, said the deal would give the companies a greater scale to, “drive R&D investment in infrastructure and talent.”