Congressional, Activist Critics Challenge Comcast, AT&T Acquisitions

By Josh Long

**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in Q1 2014.**

Congress seems to be paying close attention to two monster mergers that promise to transform the communications and pay television landscape.

For instance, Congresswoman Doris Matsui this week called for a hearing on the $45.2 billion acquisition of Time Warner Cable by Comcast and AT&T’s $49 billion deal to gobble DirecTV. Just yesterday, in an effort to protect open access to the Internet, Sen. Al Franken (D-Minn.) asked Comcast in a letter whether it would abide by Net neutrality provisions even after it is not required to do so.

“Ultimately I believe that these companies need to demonstrate that these proposed mergers will not leave consumers with less choice and higher costs,” said Matsui, a Democrat from California, commenting on the Comcast and AT&T deals.  

Matsui made her request known during a separate hearing Tuesday concerning oversight of the Federal Communications Commission before the Subcommittee on Communications and Technology within the House Committee on Energy and Commerce.

No hearing on the mergers has been set yet, Jonelle Trimmer, a spokeswoman for Matsui, said Thursday. Although the FCC is reviewing the deals, Matsui said Congress has a “primary oversight role.”

“These are some of the largest mergers in our nation’s telecommunications history and Congress must exercise its oversight role to carefully examine their impact on a competitive marketplace,” Matsui said.

Comcast and Time Warner Cable appeared last month before the Senate Judiciary Committee where they faced some reservations over the deal.

Comcast and Time Warner Cable are the two largest cable companies in the United States, but the former points out the two don’t compete against each other.

Critics of the deal fear the combined company will wield excessive power in the broadband market. Franken yesterday put the heat on Comcast to clarify whether it would continue to honor Net neutrality rules beyond 2018. As a condition of its prior merger with NBCUniversal, Comcast is currently bound to comply with overturned FCC regulations that prevent the cable giant from discriminating on its network or blocking lawful websites. Comcast has said the merger will bring Net neutrality to millions of new customers in cities from Los Angeles to New York.

The FCC recently proposed a draft version of Net neutrality regulations, representing its third attempt to regulate the Internet after appellate judges in Washington, D.C. overturned its previous regulations. Comcast said it is the only ISP currently bound by the FCC’s 2010 so-called Open Internet Order, which the U.S. Court of Appeals for the District of Columbia Circuit overturned in January.

“If Comcast’s proposed acquisition of TWC were approved, nearly 40 percent of the nation’s broadband subscribers would be under Comcast’s thumb,” Franken wrote in a letter to Comcast CEO Brian Roberts, asking whether Comcast would abide by its existing obligations beyond 2018.

Comcast declined to comment.

The heat isn’t just coming down on Comcast. AT&T’s recently announced agreement to acquire DirecTV also is expected to endure heavy regulatory scrutiny at the FCC and U.S. Department of Justice.

Free Press, an activist group, is urging consumers to oppose a merger that it characterized as “the dumbest, most wasteful deal ever (at least since Comcast-Time Warner Cable).”

“These two takeovers are a perfect illustration of everything that’s wrong with America’s telecommunications market,” wrote S. Derek Turner, who oversees Free Press’ research and policy analysis efforts in Washington, in a May 19 blog. “Case in point: For the total price of these two mega-deals, AT&T and Comcast could collectively deploy super-fast gigabit-fiber broadband service to every single home in America.”

The two monster deals being reviewed simultaneously could actually work to the benefit of AT&T and Comcast, according to at least one lawyer who previously worked as an antitrust reviewer at the Federal Trade Commission.

“Antitrust regulators could be looking at the Comcast deal as creating a Goliath that would be competing against a bunch of Davids,” Amanda L. Wait, a partner at Hunton & Williams, told The New York Times. “The AT&T/DirecTV merger changes that dynamic. Post-merger, it would look more like a Goliath. That could level the playing field, or at least create one strong competitor that could challenge Comcast’s position.”