Comcast to face merger questions from House panel

Comcast executive David Cohen (left) testifies before the Senate Judiciary Committee on the proposed Comcast-Time Warner Cable merger as Time Warner executive vice president Arthur Minson listens.
Comcast executive David Cohen (left) testifies before the Senate Judiciary Committee on the proposed Comcast-Time Warner Cable merger as Time Warner executive vice president Arthur Minson listens. (REUTERS)
Posted: May 07, 2014

Comcast Corp.'s $45.2 billion deal for Time Warner Cable Inc. gets a second public airing in Washington on Thursday with a hearing before the House Judiciary Committee.

This is the second hearing on Capitol Hill over the giant merger - the Senate Judiciary Committee held one last month. Though Congress can't derail the deal or negotiate conditions, the hearings are a public forum for opponents and lawmakers to voice concerns and issues.

Former U.S. Justice Department antitrust attorney Allen P. Grunes is scheduled to testify and said on Wednesday that government regulators could view the proposed mega-merger as anti-competitive and bring litigation to stop it. One concern for the Justice Department attorneys, he said, would be that Comcast returns to the Washington regulators in two or three years with another acquisition of a cable-TV company.

"What is to stop them?" Grunes asked.

Comcast has agreed as part of this deal to shed 3.9 million cable-TV subscribers, selling some to Charter Communications Inc. and spinning others into a new publicly traded company.

As for the broadband , "It looks a little bit like the Microsoft case," Grunes, now a Washington attorney, said of a combination of Comcast and Time Warner Cable.

The Justice Department sued Microsoft in the late 1990s, claiming its dominant PC operating system stifled competition in the Internet browser market. Microsoft settled the case.

Similarly, Comcast could use its market power in the broadband business to thwart new online video services that compete with the company's legacy cable-TV service by making it expensive or difficult for those new services to stream video to peoples' homes, Grunes said. According to estimates, a combined Comcast and Time Warner Cable could control well over 30 percent of the nation's residential broadband market.

Also scheduled to testify is David Schaeffer, the chief executive officer of Cogent Communications, an Internet services company. Schaeffer told the New York Post in April that the deal will "allow Comcast to further extend its monopoly over its customers."

Matthew M. Polka, chief executive officer of a trade organization of small cable operators, and Patrick Gottsch, chairman of the Rural Media Group, are scheduled to speak to the House committee on Regulatory Reform, Commercial and Antitrust Law. U.S. Rep. Spencer Bachus (R., Ala.) chairs the committee.

C. Scott Hemphill, a Columbia University law professor who studies the interaction among innovation, competition, antitrust law, intellectual property and regulation, also will speak.

Comcast executive vice president David Cohen will represent the Philadelphia cable-TV giant. Time Warner Cable chief executive Robert D. Marcus, who will benefit from an $80 million golden parachute compensation package if the deal closes, will testify.

The hearing begins at 9:30 a.m. in the Rayburn Office Building.


bfernandez@phillynews.com

267-443-3515

comments powered by Disqus
|
|
|
|
|