Comcast to face merger questions from House panel

Posted: May 09, 2014

Comcast Corp.'s $45.2 billion deal for Time Warner Cable Inc. will get another 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 cannot derail the deal or negotiate conditions, the hearings are a forum for opponents and lawmakers to voice concerns and raise issues.

Former Justice Department antitrust attorney Allen P. Grunes is among those scheduled to testify. He said Wednesday that government regulators could view the proposed megamerger as anticompetitive and bring litigation to stop it. One concern for Justice Department attorneys, he said, would be that Comcast might return to 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 business, "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 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 people's 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 would "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 also scheduled to testify before the committee. U.S. Rep. Spencer Bachus (R., Ala.) chairs the committee.

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

Comcast executive vice president David L. 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, also will testify.

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


bfernandez@phillynews.com

267-443-3515

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