Senate committee grills Comcast-Time Warner on merger

Members of the Senate Judiciary Committee expressed deep skepticism about the proposed merger between Comcast and Time Warner at an April 9 Capitol Hill hearing.

In his opening statement on the proposed combination of the nation's largest cable and broadband providers, Committee Chairman Patrick Leahy (D-VT) emphasized that “Consumers do not want to hear complex legal jargon or obscure regulatory terms. They want to know why their cable bills are going up. They want to know why they do not have more choice of providers. Consumers are trying to find out whether and how this merger is good for them.”

Speaking on behalf of Internet and pay TV consumers, Gene Kimmelman, President and CEO of Public Knowledge urged federal regulators to block the deal. As he said:

“... the proposed acquisition of Time Warner Cable, the nation's second largest cable company, by Comcast, the nation's largest cable company and owner of all NBCU content, will threaten the continued viability of nascent competitors and endanger the continued emergence of innovative new video and other types of services delivered over the Internet.  The proposed transaction is inconsistent with antitrust policy, the goals of the Communications Act, and the broader public interest. Therefore, it should not be approved.”

Kimmelman pointed out that a combined Comcast/Time Warner would be like an octopus, with its tentacles reaching into every corner of the communications market.

Senate Antitrust Subcommittee Chair Amy Klobuchar noted that a combined Comcast/Time Warner will control 30 percent of the pay TV market and between 40 and 50 percent of the Internet access market. In most of the country, cable dominates both broadband and pay TV markets, and despite Comcast’s claims, she said, “wireless is not yet a substitute for wired broadband.” Instead, she asked pointedly, “What's in this for consumers?” The scale and scope of the combined company could give it leverage to charge competitors more for NBCU/Comcast programming, make if more difficult for independent programmers to get on its cable systems, and stunt the growth of over-the-top streaming video.

Senator Al Franken called on the FCC and Department of Justice to reject the merger.

In a separate statement Mark Cooper of the Consumer Federation of America noted that, “The merger brings the top two video and advertising markets – New York and Los Angeles – under Comcast control, giving it near total domination in the top 10 video markets.”

CFA recently published Buyer and Bottleneck Market Power Make the Comcast-Time Warner Merger “Unapprovable,” which warns of the immense power of such a merger. If it is permitted to go through, “Comcast would be so large, as a buyer of content, that it would have the power to dictate the prices, terms and conditions, exercising what antitrust calls monopsony power.”

Speed Matters urges federal regulators to look very carefully at the proposed merger, and its potential effect on consumers, workers, and the economy.

Senate Panel Expresses Caution on Merger of Cable Giants (NY Times, Apr. 9, 2014)

Examining the Comcast-Time Warner Cable Merger and the Impact on Consumers (Public Knowledge, Apr. 9, 2014)

The Comcast-Time Warner Merger Would Be a Death Blow to Emerging, Online Video Competition (News release, Consumer Federation of America, Apr. 8, 2014)

Buyer and bottleneck market power make the Comcast-Time Warner merger “Unapprovable” (Consumer Federation of America, Apr. 8, 2014)