This is the question that will determine whether the companies can close their $45.2B deal. It will collapse in Washington if Comcast and Time Warner Cable can’t persuade FCC commissioners and, to a lesser degree, antitrust regulators that the No. 1 cable operator and owner of NBCUniversal won’t have too much power to determine industry winners and losers, and set prices, if it also owns the No. 2 cable company. Execs hope to head that off by arguing that pay TV is highly competitive, and by making some specific promises upfront. For example, Comcast says today that it will extend to Time Warner Cable systems the net neutrality commitment it made to win FCC approval for the NBCU acquisition. It vows to offer “affordable standalone broadband service” in TWC territories. Comcast says that TWC’s regional sports and local news channels will be available to other pay TV distributors at reasonable prices with a right to arbitration in case of a dispute. And it will expand public interest programming including local news and children’s fare, and will guarantee carriage of non-commercial educational TV stations even if they give up their broadcast spectrum — something the FCC wants to reclaim and auction to wireless broadband providers. “In today’s market, with national telephone and satellite competitors growing substantially, with Google having launched its 1 GB Google Fiber offering in a number of markets across the country, and consumers having more choice of pay TV providers than ever before, Comcast believes there can be no justification for denying the company the additional scale that will help it compete more effectively,” EVP David Cohen says.
Comcast CEO Brian Roberts can be sure his position will receive at least a respectful hearing. He’s been close to President Obama for years: He endorsed the Affordable Care Act, was appointed to the White House’s Jobs and Competitiveness Council, and hosted a reception for the president, and been a golfing partner, during vacations on Martha’s Vineyard. Cohen was a major fundraiser for the president’s re-election campaign. NBCU chief Steve Burke is also well-wired with the GOP. He was a major fund raiser for former President George W. Bush.
Still, consumer advocates are girding for a fight. In addition to its NBCU movie studio, broadcast and cable networks, and theme parks, Comcast “is already the nation’s largest ISP, the nation’s largest video provider, and the nation’s largest home phone provider,” Public Knowledge Senior Staff Attorney John Bergmayer says. With TWC it would become “the bully in the schoolyard, able to dictate terms to content creators, Internet companies, other communications networks that must interconnect with it, and distributors who must access its content. By raising the costs of its rivals and business partners, an enlarged Comcast would raise costs for consumers, who ultimately pay the bills. It would be able to keep others from innovating, while facing little pressure to improve its own service. New equipment, new services, and new content would have to meet with its approval to stand any chance of succeeding.”