WASHINGTON – Al Franken, the former comedian who is now a U.S. senator, was sharply critical yesterday of the proposed $30 billion merger between Comcast Corp. and NBC Universal Inc., saying the merged giant wouldn't be good for consumers.
"I'm not a lawyer, but I was in show business, and for years, I worked in NBC," Franken (D., Minn.), a Saturday Night Live veteran, told a packed Senate Antitrust subcommittee hearing on the proposed merger.
"I'm worried that this merger could set off another round of media consolidation," said Franken, whose comments were unusually visceral during the four hours of hearings on the proposed merger.
He said "you'll have to excuse me" for not believing some of the promises Comcast offered when it announced the deal in December. He later added, "It's really hard to trust you guys, from my point of view."
The Franken outburst provided a glimmer of drama on a day when the House and Senate held separate hearings over the proposed Comcast-NBCU media merger. Some think the larger Comcast could move free NBC broadcasts solely onto paid cable, or could charge competitors high fees to carry NBCU's cable channels USA, CNBC, and others, driving up cable rates.
Lawmakers and other experts say they think the merger is likely to get a nod from the Justice Department after an antitrust review. But lawmakers and regulators are considering whether the Justice Department or the Federal Communications Commission should place conditions on a combined Comcast-NBCU to restrain Comcast's power in the pay-TV industry. A merged company would have about $50 billion in revenue and control some of the most popular cable networks.
Comcast executive vice president David Cohen said that he thought the hearings relieved some concerns over the merger and that Comcast intended to meet with Franken.
Comcast chief executive officer Brian L. Roberts spoke at both hearings, saying the deal would not result in massive layoffs – as many mergers do – and that Comcast had pledged to support the NBC free-over-the-air TV network. He was accompanied to the hearings by his father, Ralph, 89, who sat in the audience, and Cohen.
Roberts told the Senate subcommittee that the proposed deal was the latest step in Comcast's "improbable journey" from a small cable company in Mississippi to a national giant with 100,000 employees. He said the potential to merge with broadcasting icon NBC was "breathtaking and humbling."
The Comcast contingent received a warm welcome in the Senate hearing room from Sen. Arlen Specter (D., Pa.), a member of the subcommittee. Specter shook hands with Brian and Ralph Roberts. "I know Comcast and I know Brian and I know his father, Ralph Roberts," Specter said in his statement at the hearing. "They are really very good corporate citizens, and their management is brilliant."
NBC Universal chief executive Jeff Zucker was seated beside Roberts, his potential boss, in both hearings and testified separately. He said, "Comcast's commitment to over-the-air broadcasting has been widely underappreciated" in the deal.
Joining Roberts and Zucker on the panels in the two hearings were critics Mark Cooper, the research director for the Consumer Federation of America, and Colleen Abdoulah, chief executive of Wide Open West, a small cable operator that competes with Comcast in Detroit and Chicago.
Cooper spoke most stridently in the two hearings.
Through this merger, the "ugly business of the cable cartel will be extended to the Internet," he warned, adding that the deal would "radically alter the video marketplace" and lead to higher prices and fewer TV choices.
"The merger has so many anticompetitive effects," Cooper said, "that they just can't be fixed; they can't be unraveled."
The day began early, with a line of about 50 placeholders, lawyers, lobbyists, and others stretching through a hallway before the House hearing. One of those waiting was Carrie Biggs-Adams, a unionized NBC employee in California and a staff representative of the National Association of Broadcast Employees and Technicians. "We're very much concerned about Comcast's antiunion behavior and bringing that to NBC."
House lawmakers, in comments, seemed split along party lines with Republican members supporting the deal as free enterprise and Democrats expressing skepticism over Comcast's giant size.
Rep. Edward Markey (D., Mass.) said the matter "boils down to the seven C's." He asked, "Will this combination of communications colossi curtail competition and cost consumers?"
California Democrat Henry A. Waxman said, "I believe the best way to protect consumers is through competition. But will competition be sustainable with the largest video and broadband provider controlling huge quantities of content? There may be plenty of content outside Comcast-NBCU, but will consumers have the same abilities to access that content – both on and off Comcast's distribution platforms – as they will content from Comcast?"
Republicans were easier on Roberts. "This is the innovation our country needs and the jobs our country needs," said Rep. John Shadegg (R., Ariz.), adding that the merger would be American-owned.
With a comparison to the failed merger between Time Warner Inc. and AOL, Rep. Cliff Stearns (R., Fla.) said the deal should be allowed. If it's the right thing, it will succeed, he said, and if not, "then it will fail."