UPDATE, 10:06 AM: Comcast EVP David Cohen just fleshed out in a press call some of his company’s arguments for the Time Warner Cable deal. To those who say the combined company would be too big he says that “in this particular case we think big is good” — it would be better able to offer new and improved services. And if Comcast is wrong “it doesn’t make any difference really because, as a customer, you’ll have the exact number of choices as you had before the transaction.” The only change: With Comcast instead of TWC as a broadband or video provider consumers’ “choice will be better.” He adds that Comcast is focused “like a laser” on improving the customer experience. (Sound familiar?)
PREVIOUS, 8:09 AM: This is the kind of thing you’d expect the cable giant to assert in a regulatory filing — and that will be roundly contested, including tomorrow at a Senate Judiciary Committee hearing on the $45.2B deal. Content companies that might oppose the deal “have strong relationships” with the committee, which oversees copyright matters, Guggenheim Securities’ Paul Gallant says. What’s more, the committee includes two strong critics of media consolidation: Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.).
Comcast detailed its public interest arguments in a 175-page document delivered to the FCC this morning. It “lays out in considerable detail how Comcast and TWC are better together for millions of customers and businesses, describing the exciting enhanced services and other concrete consumer benefits that will be available because of the transaction,” Comcast EVP David Cohen says in a blog post. In addition to cable and Internet services, Comcast owns NBCUniversal.
The company indirectly takes issue with Netflix CEO Reed Hastings’ claim that Comcast imposed an “indirect tax” on the streaming video company in a recent deal: Netflix agreed to pay Comcast directly to access its broadband lines in a way that will deliver the best possible transmissions to its customers. Comcast says it has “no economic incentive” to hit up so-called edge providers because its customers “place a high premium on being able to access any Internet content they want.” Comcast would have about 30M broadband customers after acquiring TWC.
Comcast’s core argument is that a deal combining the two largest cable companies would still make it a piker in competition with tech giants including Apple, Google, Microsoft, and Verizon. But it would have the scale to “promote continued innovation by providing a broader base of customers across which to spread the high fixed costs of research and development.” It also promises to make up for TWC’s years of skimpy spending for consumer services by “adding substantial incremental investments to what TWC had planned for broadband upgrades and enhancements over the next three years.”
Some 50 activist groups — including Consumers Union, Free Press, MoveOn.org, the Parents Television Council, and the Writers Guild — sent a joint letter to the FCC and Justice Department today saying that, with TWC, Comcast would have “unthinkable gatekeeper power over our commercial, social and civic lives. Everyone from the biggest business to the smallest startup, from elected officials to everyday people, would have to cross through Comcast’s gates.”