Should We Supersize the Cable Guys?: On the Subject of the Comcast Time Warner Mega-Merger, Lobbyists, the FCC, and the “Revolving Door”

Comcast

Submitted by Elaine Magliaro, Weekend Contributor

I’m sure many of you have read or heard about Comcast’s plan to buy Time Warner Cable. If these two companies merge, Comcast would then become the cable service provider for one third of the households in the United States. It would also give Comcast “a virtual monopoly in 19 of the 20 largest media markets.” In a press release dated February 13, 2014, Michael Copps, the special adviser to Common Cause’s Media and Democracy Reform Initiative and former FCC Commissioner, said, “This is soFCC-Seal_svg over the top that it ought to be dead on arrival at the FCC. The proposed deal runs roughshod over competition and consumer choice and is an affront to the public interest.” Copps added that the $45 billion deal “would turn the already oversized Comcast empire into a colossus. The combined firms would have the muscle to push competitors out of the marketplace, leaving consumers exposed to continuing price hikes and declining levels of service.”

Copps appeared on Democracy Now! recently. He told Amy Goodman the following:

…This is the whole shooting match. It’s broadband. It’s broadcast. It’s content. It’s distribution. It’s the medium and the message. It’s telecom, and it’s media, too. And it just would confer a degree of control over our news and information infrastructure that no company should be allowed to have. And all of this is happening in a market where consumer prices are going up and up and up, and competition is going down, down, down.

Writing for The New Yorker, John Cassidy said “initial verdicts” of the proposed merger were “largely negative.” Cassidy quoted The Consumers Union as saying, “This has the potential to be a very bad deal for consumers” and The Financial Times as saying, “Too often, the Federal Communications Commission has let itself be bought off.… This time it should steel itself to say no.”

Cassidy added that even though cable companies are “already hugely unpopular, someone unfamiliar with Washington might assume that the merger has no chance of getting regulatory approval—but that would be an error.” He said that Comcast is a company with connections, “and it is going up against a set of politicians and regulators who are compromised by their prior dealings with the company, or with other big players in the cable industry.”

In Revolving Door: Top Obama Admin Antitrust Officials Tied to Comcast (Republic Report), Lee Fang said that many people were predicting a “media blitz” by both companies involved in the planned merger “to pressure governments [sic] officials to accept the deal. When Comcast purchased NBC Universal, lobbyists were hired to ensure the merger went through. Critics charge that the payments went beyond the traditional influence industry: after signing off on the Comcast-NBC deal, FCC Commissioner Meredith Attwell Baker was hired by Comcast for an undisclosed amount.”

Fang wonders if the revolving door will shape the antitrust enforcement for the proposed merger. He said that Republic Report looked into the officials responsible for overseeing antitrust enforcement, and found that at least two had close ties to Comcast.

Fang:

The recently installed head of the Department of Justice Antitrust Division, William Baer, was a lawyer representing GE and NBC in their push for the merger with Comcast. At the time, Baer was an attorney with the firm Arnold & Porter. To his credit, Baer said last month that he is skeptical of further consolidation of the cable market. Disclosures reviewed by Republic Report show that Baer will continue receiving payments from Arnold & Porter for the next eleven years as part of his retirement package.

Maureen Ohlhausen, one of four commissioners on the Federal Trade Commission, which oversees antitrust enforcement, provided legal counsel for Comcast as an attorney just before joining the FTC. She also represented NBC Universal in the year before [befor]e becoming a commissioner in April of 2012. NBC Universal completed its merger with Comcast in January of 2011.

David Carr (New York Times) said that if this merger goes through “Comcast would not only lock up 30 percent of the cable market (and an ever greater share of broadband), but pricing leverage in all directions — with customers, with traditional programming providers like networks and cable networks, and with over-the-web providers like Netflix.” He added that cable isn’t just television anymore. He said that “it is where the Internet comes from. And should this deal go through, more people who want to cut the cable cord will still have to buy their broadband from a cable company where prices go only one way — up.” Carr continued, “It is akin to leaving a house that is on fire and having it chase you down the street.”

Carr also noted connections that President Obama has to Brian Roberts, chief executive of Comcast and to David L. Cohen, “who oversees the company’s relationship with regulators in Washington.”

Carr:

President Obama should be paying attention to a deal that has such significant consumer and business implications, but he needs no introduction to the players involved. Mr. Roberts has golfed with the president and hosted him at his residence on Martha’s Vineyard.

David L. Cohen, who oversees the company’s relationship with regulators in Washington, has been a big bundler of donations for the president and staged a fund-raiser for him at his home in Philadelphia that raised $1.2 million. In recognition of those close ties, Mr. Cohen was one of the guests at a state dinner at the White House for the French president, François Hollande, last week.

Michael Coops on Democracy Now!:

Wheelbarrows full of money, legions of lobbyists are at work on this. Our society right now is controlled more by money, I think, than in any era since the notorious Gilded Age back at the end of the 19th century. What we all need to realize in this country is if there’s—there’s never going to be democracy now until we have media democracy now, and we’re not going to get media democracy now until we put the brakes on this mindless consolidation we’ve been going through for the last 15 or 20 years, and put the Federal Communications Commission back in the business of protecting the public interest.

In a Washington Post opinion piece, Katrina vanden Heuvel said that the proposed Comcast Time Warner merger didn’t pass “the smell test.” She added that Comcast would have “virtual monopoly cable control over news and public service programming in cities like Chicago, Los Angeles, Philadelphia, New York City and Washington, D.C.” She said that the company would be able “to exact price concessions from content providers, forcing some out of business, limiting innovation and variety. With net neutrality rules now under assault, it will be positioned to charge discriminatory rates for high-speed access or to discriminate against Netflix and other companies seeking to stream over its cable. And Comcast will be in position to decide what gets priority access and what viewers across much of the nation won’t see.”

Vanden Heuvel:

Comcast is just digesting its previous mega-merger, the takeover of NBC Universal that should have been blocked by the Federal Communications Commission (FCC). That leaves Comcast controlling an empire that includes NBC, CNBC, MSNBC, USA Network, Telemundo and other networks.

Here the merger doesn’t just impact the marketplace of cable; it threatens the marketplace of ideas. The protection of free speech under our Constitution depends on citizens having access to many ideas, many sources, many ways of getting ideas and information. Letting mega-corporations consolidate control of key parts of the media infrastructure is a direct threat to that access.

It is certainly doubtful that the merger of the two largest cable companies will be good for consumers. In Merging Cable Giants Is ‘an Affront to the Public Interest,John Nichols warns, “When media conglomerates merge, they do not provide better service or better democracy. They create the sort of monopolies and duopolies that constrain America’s promise. Franklin Delano Roosevelt was right when he decried ‘concentration of economic power in the few’ and warned that ‘that business monopoly in America paralyzes the system of free enterprise on which it is grafted, and is as fatal to those who manipulate it as to the people who suffer beneath its impositions.’”

Nichols adds that giving Comcast such dominance over video and Internet communications would allow the company to “drive hard bargains with content providers.” The company would also be able to “define the scope and character of news and public-service programming in dozens of states and hundreds of major cities—including Chicago, Los Angeles, Philadelphia, New York City and Washington, DC.”

Nichols says that the merger is not only bad for consumers, musicians, documentary makers and other creators—he says it is also bad for “the democratic discourse of a nation founded on the premise memorably expressed by Thomas Jefferson in 1804 when he wrote, ‘No experiment can be more interesting than that we are now trying, and which we trust will end in establishing the fact, that man may be governed by reason and truth. Our first object should therefore be, to leave open to him all the avenues to truth. The most effectual hitherto found, is the freedom of the press.’”

Nichols:

The idea that “all the avenues to truth” would be controlled by a monopoly, a duopoly or any small circle of multinational communications conglomerates is antithetical to the understanding of the authors of a free press, and of its true defenders across the centuries.

Former FCC Commissioner Michael Coops Warns About Comcast-Time Warner Merger, “Mindless” Media Consolidation

SOURCES

Revolving Door: Top Obama Admin Antitrust Officials Tied To Comcast (Republic Report)

Former FCC Commissioner Warns About Comcast-Time Warner Merger, “Mindless” Media Consolidation (Democracy Now!)

Proposed Comcast-Time Warner Cable Deal Is Affront to Public Interest (Common Cause)

Does Comcast Own Washington? (The New Yorker)

Stealthily, Comcast Fortifies Its Arsenal (New York Times)

Comcast-Time Warner doesn’t pass the smell test (Washington Post)

Merging Cable Giants Is ‘an Affront to the Public Interest’ (The Nation)

FURTHER READING

Crony Capitalism: Chuck Schumer’s Brother Tied To Comcast Deal He Supports (Huffington Post)

Schumer reassures New York about Comcast-Time Warner Cable deal, doesn’t mention his brother was the dealmaker (Little Sis)

Schumer recuses himself from Comcast deal, claims no knowledge of brother’s role (Little Sis)

FCC commissioner weighs in on Comcast -Time Warner merger (The Lead)

Revolving Door: FCC Commissioner Votes For Comcast/NBC Merger And, Four Months Later, Given Position As Senior Vice President in Comcast-NBC (Jonathan Turley)

21 thoughts on “Should We Supersize the Cable Guys?: On the Subject of the Comcast Time Warner Mega-Merger, Lobbyists, the FCC, and the “Revolving Door”

  1. Al Franken Points Out Comcast’s History Of Breaking Merger Promises
    By Gerry Smith
    Posted: 02/28/2014
    http://www.huffingtonpost.com/2014/02/28/al-franken-comcast_n_4874190.html

    Excerpt:
    Sen. Al Franken (D-Minn.) told regulators this week that Comcast’s history of violating merger commitments “raises serious questions” about whether the company’s proposed acquisition of Time Warner Cable will benefit consumers.

    The Federal Communications Commission is considering whether to approve Comcast’s $45 billion purchase of its smaller rival. The deal would unite the two biggest cable operators in the country and give Comcast greater control over broadcast, cable television and high-speed Internet networks.

    Comcast says the deal would not hurt consumers because the two companies do not compete in the same markets. But consumer groups say the merger would give Comcast too much power, stifling potential competition and eventually leading to higher prices.

    Before approving mergers, regulators must decide whether the deals are in the public’s benefit, and often extract promises from companies that they’ll take steps to benefit consumers, like extending high-speed Internet service to underserved communities or promising not to favor their services over those of competitors.

    But in a letter this week to FCC Chairman Tom Wheeler, Franken said Comcast has “a history of breaching its legal obligations to consumers,” including pledges the company made to win regulatory approval for its 2011 merger with NBC Universal, the television and movie production company.

    As one example, Franken cited Comcast’s settlement with the FCC in 2012 after the company failed to aggressively market its $50-a-month standalone Internet service, a condition of the NBC Universal merger. The FCC imposed that condition to ensure the company did not force customers to buy bundled services if they only wanted high-speed Internet.

    Franken also alleged Comcast violated net neutrality rules the company was required to follow as part of the NBC Universal deal. Net neutrality rules are meant to prevent Internet providers like Comcast from discriminating against certain Internet content, like charging to stream some online services faster than others.

    In 2012, the consumer group Public Knowledge filed a petition with the FCC alleging Comcast violated those rules when the company introduced customer data caps and then said use of its online video service, Xfinity TV On Demand, would not count toward those caps.

    The FCC has not ruled on the consumer group’s petition. In January, a federal appeals court overturned net neutrality rules.

    Comcast later suspended data caps, but has resumed testing a tiered system that charges customers in some markets more for higher broadband use.

    “Recent history, including Comcast’s adherence to the legal obligations it owes the public, should be taken into account when deciding whether to permit further consolidation in the cable and broadband networks,” Franken wrote.

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