Lawmakers at a House Judiciary Committee hearing Thursday on Comcast Corp.’s proposal to take a majority stake in NBC Universal put both company chiefs in the hot seat.
But legislators weren’t as interested in shining a spotlight on antitrust concerns as they were on examining the companies themselves and their track records on labor and diversity, as well as with independent producers.
Thursday’s hearing was the third on Capitol Hill concerning the proposed merger. The House Energy and Commerce and Senate Judiciary panels both held hearings earlier this month. A fourth panel — Senate Commerce — also plans to hold hearings on the deal.
The merger, which was announced in early December, would give Comcast a 51 percent stake in NBC Universal. NBC’s current owner, General Electric Co., would hold the remaining 49 percent.
On Thursday, members of the committee and a number of witnesses argued that the merger would lead to job losses, an idea the companies have vehemently denied. Larry Cohen, president of the Communication Workers of America (CWA), which represents employees at both Comcast and NBC, said “the combination will in fact lead to the loss of good jobs.”
Cohen also sounded a theme similar to one proposed by Sen. Al Franken (D-Minn.) at another hearing earlier this month: the companies couldn’t be trusted to keep their word.
When Comcast acquired AT&T Broadband in 2002, “they made a commitment to me that they would respect their employees’ right to a union voice on the job,” Cohen said.
But after the deal closed, he said, one executive announced: “We’re going to wage war to decertify the CWA,” Cohen said. Comcast chief Brian Roberts said the company’s labor practices were in line with the rest of the cable industry, and both Roberts and NBC’s Jeff Zucker said Thursday that the point of the deal was to combine companies that had little overlap, meaning few job cuts.
Other witnesses said the entertainment industry is structured in a way that makes it difficult for independent producers to survive, a structure the merger would exacerbate. Jean Prewitt, president of the Independent Film and Television Alliance, said that Comcast’s interest in NBC is to “own more TV shows and feature films” and to “avoid the transaction costs of having to deal with third parties” which would shut independent producers out.
Two members of the Judiciary panel — Reps. Shelia Jackson-Lee (D-Texas) and Maxine Waters (D-Calif.) — ripped into Roberts and Zucker for what they saw as the lack of diversity in programming and in the executive ranks at either company.
Armed with lists of board members for both companies, Waters asked Roberts why Comcast had only one woman and one black man on its board. She then asked Zucker why NBC didn’t currently have any black programming on NBC. ”Is there some assumption that black programming is not profitable?” she asked him.
Zucker said that diversity was one of his strategic goals and that the company was trying to do better.
Both Roberts and Zucker in their testimony in support of the proposed merger articulated themes similar to those from previous hearings and from their filing with the Federal Communications Commission.
Other distributors don’t have to worry, Roberts said, because the FCC rules will apply and Comcast won’t be able to discriminate against them. Other programmers also don’t have to worry, he said, because Comcast is committed to providing local and independent programming.
Roberts again framed the transaction as a so-called vertical one, which usually raises fewer concerns for antitrust regulators. Last month the Justice Department signed off on a vertical merger between ticket giant Ticketmaster and concert promoter Live Nation, albeit after requiring the parties to make some changes in the deal to address some of the vertical concerns.
Rep. John Conyers, Jr. (D-Mich.), who chairs the Judiciary Committee, sounded the alarm on vertical mergers, and ripped into the Justice Department’s enforcement record.
“I never thought the Antitrust Division operated with any real effectiveness,” he said, “there are cases where vertical mergers can be more dangerous than horizontal mergers.”
Mark Cooper, the director of the Consumer Federation of America, who testified at previous hearings, again framed the transaction as a horizontal one that would wipe out head-to-head competition between the two companies in some local markets.
Other lawmakers raised concerns local to their districts, including access to local sports programming.
Both the FCC and the Justice Department have to approve the deal. Comcast received its second request for documents from the Justice Department yesterday, according to Comcast spokeswoman Sena Fitzmaurice. That marked the start of the extended review of the deal.