Skip to content
Link copied to clipboard

Lawmakers call for tough review of Comcast deal

U.S. Rep. Maxine Waters, a Democrat from Los Angeles, has emerged as a deep skeptic of Comcast Corp.'s proposed $30 billion deal for NBC Universal Inc., and about 70 like-minded lawmakers have joined her in calling for more public hearings on the merger.

U.S. Rep. Maxine Waters, a Democrat from Los Angeles, has emerged as a deep skeptic of Comcast Corp.'s proposed $30 billion deal for NBC Universal Inc., and about 70 like-minded lawmakers have joined her in calling for more public hearings on the merger.

Waters said in an interview Thursday that she was concerned about the economic power of Comcast-NBCU and the lack of diversity in the media industry.

The proposed deal, announced in December, will combine the nation's largest cable company, with about 24 million subscribers, and one of its largest entertainment companies, NBC Universal.

"America has to make sure it never gets in the position that one big company will control what we see and hear," Waters, one of the most prominent African American lawmakers in Congress, told The Inquirer.

"We cannot have the Internet controlled by any one conglomerate," she added.

Comcast has responded with its own show of political support - a letter jointly signed by the governors of Pennsylvania, New York, and California in late May, and letters extolling the deal's benefits from most of the Pennsylvania delegation.

A leader among the pro-Comcast lawmakers is Rep. Bob Brady (D., Phila.), who sponsored a letter filed with the Federal Communications Commission and signed by 15 of the 18 Pennsylvania representatives in Washington.

Lawmakers seem convinced of the economic benefits to Comcast, which employs 11,000 in Pennsylvania.

Gov. Rendell said Friday that he supported the deal partly because of the "prestige factor."

"The merger will have a dramatic effect for us," he said. "Not that Universal's head office will move to Pennsylvania but there will be a ramping up of the headquarters personnel in Philadelphia.

"It cements the benefit of having Comcast here."

The high-stakes political face-off comes about halfway through the contentious regulatory review of the Comcast-NBCU combination in Washington and as concerns develop that the review could spill into 2011. The Department of Justice is scrutinizing the deal for antitrust issues, while the FCC is evaluating it for public benefits.

Comcast spokeswoman Sena Fitzmaurice said Friday that the company did not control the Internet: "We don't come close to being dominant in that market. More than 75 percent of the country does not have Comcast as their broadband connection."

About 16 million households have Internet connections through Comcast, according to regulatory filings.

Waters, who previously has taken on big oil companies and the George W. Bush White House, has gathered the signatures of 68 representatives who have asked for public hearings on Comcast-NBCU at the FCC.

Others in the group include Ohio Rep. Dennis Kucinich, Michigan Rep. John Conyers, Massachusetts Rep. Barney Frank, and New York Rep. Charles Rangel. They have submitted a list of 50 questions they'd like Comcast or NBCU to answer.

On Thursday, the federal agency granted the Waters request and said it would hold a public hearing July 13 in Chicago. Chicago was chosen because Comcast's large cable holdings and NBC TV properties are there, an FCC official said.

Separately, the House Judiciary Committee will hold a public hearing Monday in Los Angeles. Waters is a member of the committee.

Those expected to testify include Alex Nogales, president and chief executive officer of the National Hispanic Media Coalition in Los Angeles, and Samuel Kang, managing attorney of the Greenlining Institute in Berkeley, a nonprofit advocacy organization representing low-income and minority communities in California.

According to the prepared statement, Kang is expected to say: "I sincerely hope that this administration's regulatory scrutiny of the Comcast merger is more comprehensive than its regulatory scrutiny of offshore drilling."

Comcast has not said it was opposed to more hearings - chief executive Brian L. Roberts testified in four of them in Washington earlier this year. But the company would like an expeditious review process.

"We are confident that, after a fair and thorough examination, the FCC will find that this joint venture advances the national communications policy goals for diversity, localism, innovation and competition," stated the Brady-sponsored letter to the FCC.

Brady's office did not return calls seeking comment. The Philadelphia lawmaker has received substantial campaign contributions from Comcast in the last two election cycles, according to the Center for Responsive Politics, a nonprofit research organization.

A spokeswoman for Rep. Allyson Schwartz, who signed the Brady letter, said the congresswoman believed the merger could bring economic benefits to the Philadelphia area.

Three Pennsylvania representatives who did not sign the Brady-sponsored letter were Reps. Mike Doyle, Paul E. Kanjorski, and Joseph Sestak. Doyle and Kanjorski filed separate letters with the FCC.

Sestak has not filed a letter. He said in a statement Friday: "The merger of Comcast and NBC Universal would create one of the largest media companies in the world, and could be a tremendous economic opportunity for Pennsylvania. However, many of my constituents are concerned about the possibility of higher costs or lost jobs.

"The FCC estimates that cable costs have increased at triple the rate of inflation over the past 15 years. Some contend that this is due to industry consolidation, and that the potential combined debt of NBC and Comcast may lead to lost jobs in Pennsylvania."

Sens. Robert Casey and Arlen Specter support the deal, according to a separate letter on file with the FCC.

Specter, in a May 26 statement, additionally commented: "I believe that a fair and thorough examination of this transaction, including the issues raised by Senator Kohl, will result in the FCC and Justice Department finding that this joint venture advances the national communications policy goals of diversity, localism, innovation, and competition. I urge the FCC complete its review of the transaction in a timely manner."

Wisconsin Sen. Herb Kohl, chairman of the Senate Antitrust, Competition Policy and Consumer Rights Subcommittee, has said the Justice Department should attach conditions to an approval of the deal.

One condition would be that Comcast make all entertainment programming that it owns, or even partially owns, available to competing cable TV or satellite-TV companies, according to Kohl. A second would be that Comcast sell NBCU's stake in the Hulu online video site.

Waters said she viewed the letters of support from Pennsylvania lawmakers as "hometown representatives . . . coming to the aid of a large corporate interest with influence in the state."

In any event, she has gotten attention. "I have talked with more executives with Comcast and NBC," said Waters, "than I knew existed."

Comcast Campaigns

Comcast Corp. was the largest contributor to the campaigns of several Pennsylvania lawmakers in their latest election cycles. The contributions are the combined amount from individuals at Comcast and the company's political action committee:

U.S. Sen. Arlen Specter (D., Pa.)                  $120,880

U.S. Rep. Robert Brady (D. Phila.)                  $18,100

U.S. Rep. Chaka Fattah (D., Phila.)               $20,000

U.S. Rep. James Gerlach (R., Chester)            $18,650

U.S. Rep. Joseph Pitts (R. Lancaster)            $10,000*

NOTES: The election cycle for the representatives was 2009-10 and the cycle for Sen. Specter was 2005-10.

*Comcast was tied in the No. 1 position for the Pitts campaign with Fiat.

SOURCE: Center for Responsive Politics