Comcast Defends Time Warner Deal Before Skeptical Senators
U.S. Senate Photographic Studio-Rebecca Hammel
“Our primary focus should be on how it would impact consumers,” Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., said, adding that the “FCC and Justice Department (should) consider just as carefully the impact on consumers as they review the pending merger.”
Generally speaking, consumers have expressed concerns that cable and Internet prices continue to go up while customer service remains pretty terrible.
Comcast made its case in a 180-page filing with the FCC Tuesday, and at the hearing, Comcast and Time Warner Cable executives outlined many of the same benefits, among them faster network upgrades and better technology for Time Warner subscribers. Since the two companies currently don’t face off in local markets, there won’t be a loss of competition, Comcast executives say.
“There are no competitive issues with this deal,” said Comcast Executive Vice President David Cohen. “If this transaction is approved it will allow us to better compete against our national and global competitors.”
But senators pressed Comcast about how consumers could benefit from the deal after the cable giant admitted the deal isn’t likely to result in lower prices or greater competition.
“Prices won’t go down. Where’s the beef? Where’s the there there for consumers?” asked Sen. Richard Blumenthal, D-Conn. “The case has yet to be made that consumers will benefit in a tangible way.”
Even Cohen admitted under questioning that the cable giant still has pretty terrible customer service at times.
“It bothers us we have so much trouble delivering high quality of service to customers on a regular basis,” Cohen said. He said the company has spent billions trying to improve its customer service, but company executives are “deeply disappointed as to where we are” with that.
While all of the senators who showed up for the hearing (and many didn’t) expressed various degrees of concern about how the deal would impact subscribers, only one — longtime Comcast critic Sen. Al Franken, D-Minn. — said regulators should reject it.
“I’m worried this deal continues a trend of media consolidation that has led to increasing prices for consumers,” Franken said before asking Cohen several pointed questions about whether Comcast had abided by all of the conditions it agreed to when it acquired NBCUniversal.*
The senators have little say over whether regulators will approve the deal, but their opposition could make it significantly harder for the companies. Hearings like this allow lawmakers to raise issues they want the Federal Communications Commission and Justice Department to examine, and they give rivals a chance to make their case for possible conditions.
During the hearing, executives from two companies testified they have had problems negotiating agreements with Comcast. James Bosworth, CEO of Back9Network, a golf-related channel, said he hasn’t been able to reach an agreement with Comcast to include his channel in its lineup, and his negotiations with Time Warner Cable stalled after the Comcast deal was announced. Richard Sherwin, CEO of Spot On Networks, said Comcast has refused to sell him wholesale Internet service in some areas where he wants to offer wireless service to consumers.
Comcast and Time Warner Cable executives denied they’ve shut out the companies, saying they were still in productive talks with both.
* NBCUniversal is an investor in Revere Digital, Re/code’s parent company.