“It's almost like a nationwide octopus with tentacles each able to squeeze off innovation,” warns Gene Kimmelman, President of consumer group Public Knowledge
Comcast's deal for Time Warner Cable could give Comcast too much control over cable and television, the Senate Judiciary Committee was told as it opened its review of the deal at a hearing Wednesday.
“It's almost like a nationwide octopus with tentacles each able to squeeze off innovation,” Gene Kimmelman, President-CEO of consumer group Public Knowledge told the committee. He warned the deal would give Comcast “undue power” over programming, lock in high prices for NBCU programming and increase Comcast to dissuade moving ahead with rival services.
The comments came as top officials of Comcast and Time Warner Cable defended the deal.
“Combining will allow the installation of next generation video faster than either company could do on its own,” said Arthur T. Minson Jr., Executive Vice President and Chief Financial Officer for TWC.
David Cohen, Comcast's Executive Vice President, said the increased scale the deal will bring will help speed the benefits of next generation, faster cable systems. But Comcast's peers and competitors need convincing.
Jamie Bosworth, CEO of Back9Network — a cable channel which offers a rival to Comcast's Golf Channel — said Comcast is already refusing to negotiate fairly for its channel.
“I am concerned that this merger will make a bad situation near-impossible for independent programmers — particularly those that compete with channels owned by a vertically-integrated powerhouse with unparalleled control over distribution,” Bosworth said.
Cohen went on to say that: “Traditional boundaries are obsolete. It will give us more to invest. Objectively this is not a challenging transaction from the antitrust perspective. We won't get undue power over programmers. Consumers are the big winners in this transaction.”
The discussion continued as several senators expressed concerns about the deal, with Utah Republican Senator Michael S. Lee citing its potential effect on cable programming.
“Considering the significant share, the well known political leanings of NBC, Comcast might have the ability to discriminate against political content including conservative political content,” Lee said.
Lee's constituent, Democratic Senator Amy Klobuchar, added that questions about cable competition are “one of the most critical issues this committee faces,” noting that the competition “touches everyone” while questioning the deal's consumer benefits.
“Its size and scope would give it the power to affect price and services throughout the online industry,” Klobuchar said.
Sen. Richard Blumenthal (D-Conn.) also questioned whether the regional sports networks owed by both companies would give the combined company too much ability to force competitors to pay high prices.
“What we have heard among colleagues is a general sense of skepticism. Prices won't go down and aside from vague promises, the case has yet to be made that consumers will really benefit.”
Blumenthal also voiced his concerns about the effect on regional sports networks. ”I am concerned that the deal gives Comcast the means and incentive to overcharge your rivals, for a crucial element of programming involving sports.”
Sen. Al Franken (D-Minn.) accused Comcast of citing the value of “robust competition” from TWC in seeking approval of its NBCU deal, but dismissing that same competition in seeking approval of its deal for TWC.
“Comcast can't have it both ways,” he said in reiterating his opposition to the deal, which he said could raise prices to consumers and lessen competition.