Proponents and critics of Comcast Corporation’s proposed plan to take a majority stake in NBC Universal gathered for the last of four scheduled hearings on Capitol Hill Thursday, retreading themes largely visited in sessions last month.
In a hearing before the Senate Commerce Committee, Comcast chief executive Brian Roberts reiterated the company’s commitments to add new independent cable channels to its roster and give other cable providers access to NBC’s programming. The goal of the joint venture with General Electric, he said, was to invest in and improve the fourth-ranked NBC.
“My principle motivation is to make a bet that we are going to see a rebound,” Roberts said. “You don’t buy the number four network and want to do harm. GE has chosen us to partner with because they think we will be more committed to wanting to see more innovation and investment.”
Opponents of the merger, including the Consumer Federation of America’s Mark Cooper and Colleen Abdoulah, chief executive at the cable operator Wow!, both of whom testified at previous hearings, said they worried about the market power the combined entity would have.
“We’re not here to ask for favors, we’re here as a buyer of content,” Abdoulah said. After the merger, “we will pay more for the content and have no other choice but to pass that on to consumers.”
The regulators overseeing the reviews of the deal, Federal Communications Commission Chairman Julius Genachowski and Assistant Attorney General Christine Varney, who heads the Antitrust Division, joined the hearing for a separate opening panel.
Lawmakers did not urge regulators to reject the deal, but did express some concern about the structure of the media and cable markets.
“These are services that are vital to our democracy. They shape the way we communicate. They shape the way we share news and information,” Sen. John Rockefeller (D-W.V.), who chairs the Senate panel, said in an opening statement. “When consolidation occurs in these markets, we need to pay attention.”
Legislators again asked about access to programming online, an issue Sen. Herb Kohl (D-Wis.) who heads the antitrust subcommittee raised in a previous hearing. Kohl wrote to NBC last month and asked why the network put some Olympics content behind a pay wall online that required a cable subscription.
A new addition to the hearing lineup, president of the Writers Guild of America, West John Wells, also said the greatest danger of the merger might be its effect on the online video market. “Comcast may be tempted to favor its content,” he said.
Both Varney and Genachowski said their agencies were examining what role online video played in injecting competition into the market. Video on the internet was still “in the very early chapters,” Genachowski said.
Both officials, who were limited from saying much about the deal due to the confidential nature of the review process, instead pointed to previous actions to outline their approach.
When Sen. Olympia Snowe (R-Maine) suggested the DOJ had not been very aggressive in going after anti-competitive mergers, Varney said: “I can assure you there is no rubber stamp at the Department of Justice.”
She drew on the examples of the merger between Ticketmaster and Live Nation, which won approval after the companies agreed to sell some assets and adhere to a set of rules, and a proposed purchase that Blue Cross Blue Shield of Michigan dropped this week after the agency threatened to sue.
Sen. Kay Bailey Hutchison (R-Texas), on the other hand, suggested the agencies might be too aggressive. “I hope they avoid significant conditions that force the government to constantly police the market,” said the committee’s ranking member.
In response to questions from Hutchinson about whether the agencies are “creative” with issues outside of their expertise, Genachowski said that “any decision we make needs to be tied to the issues that arise in that transaction.”
The FCC put out a request for public comments on the Comcast transaction last week, and the DOJ has moved into its extended review of the deal.
Previous similar mergers have not lasted, a topic both Roberts and lawmakers raised in the hearing. News Corp. sold its stake in DirectTV in 2008, and Time Warner spun off its cable operations, Time Warner Cable, last year.
