Selling A Media Merger
David Hatch reports in National Journal magazine this week about cable provider Comcast's efforts to sell its proposed merger with NBC Universal to federal regulators. Since the deal was announced in December, Comcast Chairman and CEO Brian Roberts has made Washington his second home, traveling to the city repeatedly to sell the transaction on Capitol Hill.
Critics of the merger, including independent networks, labor groups, small cable outlets, and watchdogs, warn of dire consequences, from higher monthly rates and fewer programming options to anti-competitive behavior and less media diversity.
Even before the FCC and the Justice Department commenced their regulatory reviews in late January, the jockeying was intense, with Comcast tapping nine outside firms in late 2009 to buttress its lobbying efforts including Blank Rome, Capitol Solutions, and the Duberstein Group, according to congressional lobbying disclosures. Comcast's message, according Executive Vice President David Cohen, is: "With this joint venture, consumers across the country will benefit from new investments in local news and other programming, as well as our commitment to continue NBC as an over-the-air broadcast service."
The merger, valued at $30 billion, would combine Comcast, the nation's largest cable and residential broadband provider and third-largest phone company, with NBC Universal, the country's fourth-biggest programming and entertainment empire.
Andrew Schwartzman, president and CEO of the Media Access Project law firm, is part of a growing chorus of critics who argue that rejecting the deal is the only way to fully protect consumers and competitors.
"I have some experience in this industry and I flat-out don't trust Comcast and NBC to operate in the best interest of consumers," Sen. Al Franken, D-Minn., wrote in a February 10 fundraising memo. At a Senate hearing a week earlier, Franken, a former cast member and writer on NBC's Saturday Night Live program, gave Roberts a sobering taste of the passions unleashed by the proposed deal when he accused the CEO of having lied during a private meeting.
Critics say that there's ample justification for doubting Comcast. In early 2008, the company drew embarrassing headlines over allegations that it hired seat warmers to prevent others from attending an FCC field hearing on its Internet practices. Later that year, the FCC cracked down on Comcast for blocking customer access to a file-sharing site through which users swap movies, music, and other content.
Sensitive to the accusations and underscoring that Comcast has friends in high places,
company officials placed a few calls to prompt a supportive statement issued on behalf of Senate Majority Leader Harry Reid, D-Nev. The company also has taken other steps to repair its bad-boy image, including making financial contributions to three public-interest groups that are among its harshest critics and rolling out ultrafast Internet service in the nation's capital, starting with a predominantly lower-income African-American neighborhood. To read more, click here. (Subscription required)
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