“I held back because I knew it may be the type of voluntary commitment that would be attractive to the chairman” of the Federal Communications Commission, Cohen said in a recent interview.
The strategy was quintessential Cohen. The hard-charging 56-year-old veteran of Philadelphia politics and Democratic campaign bundler is Comcast’s chief dealmaker in Washington.
In Cohen’s decade at the firm, Comcast has ballooned in size through a series of mergers that he has steered through government approvals. Today, with $58 billion in annual revenue, Philadelphia-based Comcast is the nation’s biggest provider of broadband Internet and cable television and the owner of network television programs, a movie studio and broadcast stations across the country. Any company doing business in media or technology crosses paths with Comcast and usually comes with hat in hand, eager to reach the cable giant’s 22 million customers.
A consequence of all that power is a stubbornly strong cable television model that keeps many households paying upward of $100 a month for their service bundles, critics of the company say. Even as Verizon, Apple, Netflix and YouTube have tried to capture the living room, Comcast still dominates.
Such pricing structures are anathema in Silicon Valley. By now, cheaper a la carte television viewing was supposed to have taken over American homes, where just an Internet connection would give consumers the pick of any video, like the food off a restaurant menu. This remains out of reach for most Americans, though Apple and Google are pushing to bring it into the mainstream.
But if anything, Comcast’s rising influence and bottom line have shown that the power remains in the hands of the cable guy.
“They are hugely important,” Joel Kelsey, a policy director at consumer interest group Free Press, said of Comcast, “because they can single-handedly sink or swim multiple businesses that rely on the Internet ecosystem by virtue of controlling the dissemination of information through their pipes, and now by supplying so much of the content.”
“So many companies have come to us and asked that we fight their battles for them because they are afraid of retribution,” he added.
Part wonk, part rock star
A critical part of Comcast’s strategy is Cohen, its secret weapon. The father of two would not turn heads outside the Beltway. He drives a Toyota 4Runner and prefers unfussy dark suits and garden-variety wire-rim eyeglasses. But in the rarified circles of Washington, with his vast network of high-powered contacts, Cohen enjoys rock-star status.
His appeal comes from an ease with government bureaucracy, say his friends and even his critics. Cohen is a policy and political wonk with a voracious appetite for white papers and data on arcane telecommunications regulations. Pole attachments, retransmission consent and program-access terrestrial loopholes are jumbles of FCC jargon to most, but that’s Cohen’s language of love.
“David loves politics, he loves government, and he has incredible situational awareness — a 360-degree view of business,” said Blair Levin, a former senior adviser to FCC Chairman Julius Genachowski. “He’s just so good at what he does.”
Cohen benefits from Comcast’s willingness to spend lavishly to get federal officials to see things the firm’s way.
The company’s growth has been mirrored in Washington, where Cohen has multiplied his staff to 20 full-time lobbyists and policy experts and dozens of outside lobbyists. Comcast spent $8.3 million on lobbying last year, putting it in ninth place for K Street spending, above Verizon, Lockheed Martin and Royal Dutch Shell, according to the Center for Responsive Politics.
Cohen says the company has to spend more because it is a natural target of scrutiny. He also defends the cable business model, saying it costs billions a year to maintain Comcast’s network.
Content, say Cohen and other Comcast executives, is expensive to create. Without the bundling of channels, they say, some programs would not survive and the quality of television would fall. They noted that most NBC Universal content is available online, where it can be accessed cheaply or free.
“People say cable is a deregulated industry, but we are like the most regulated of the deregulated,” Cohen said during a typical one-day Washington blitz of media events and meetings with lobbyists and federal regulators. “There’s not a day that doesn’t go by at the FCC that doesn’t affect our company.”
The company does not always lobby by spending lots of money.
In May 2011, a Comcast manager threatened to pull funding from a Seattle-based media advocacy group that criticized the company for hiring a former Republican FCC official, Meredith Attwell Baker, just after she supported the NBC Universal deal.
Markham Erickson, an attorney for Bloomberg and several Web firms, said companies are often afraid to challenge Comcast. They worry that the cable giant will cut them out of business deals or force them into costly legal battles, he said. Bloomberg has waged a two-year battle with Comcast over the placement of its business news channel in the hinterlands of the TV dial.
“It’s ridiculous when you look at the long list of lawyers Comcast has on retainer,” Erickson said. “It’s just too intimidating for a start-up from Silicon Valley with a few employees with no legal expertise to take on.”
Comcast and other cable companies are under investigation by the Justice Department for their treatment of Web firms. Many consumers have limits on how much data they can use in their homes. Comcast does not always count its online videos against that cap but does so for Internet videos distributed via Netflix, Facebook, Amazon.com and others.
These companies, and many smaller ones, fear that people will curb their consumption of online videos if they have to pay more for Internet service.
Politics in the mix
Cohen’s career got a boost when he became the chief of staff to then-Philadelphia Mayor Ed Rendell (D) in 1992. And though his reach extends inside the Beltway, he never made Washington his home.
At the gleaming new 58-story Comcast Center skyscraper, a few blocks from Philadelphia City Hall, Cohen’s office is adjacent to the offices of chief executive Brian Roberts and co-founder Ralph Roberts. Cohen described himself as a “consigliere,” or trusted top adviser, to those executives on business and legal strategy.
Since joining Comcast in 2001, Cohen has been handsomely rewarded for his successes. Last year, he signed a three-year contract that makes him one of the highest-paid corporate figures operating in Washington. He received $3 million in bonuses last year and a total compensation package of $15 million, not including his total stock holdings, according to federal records.
With the ability to pull from glitzy NBC resources, Cohen plays host to glamorous Washington events and is a leader in several powerful trade associations, including the National Cable and Telecommunications Association, the National Association of Broadcasters and the Motion Picture Association of America.
This summer, he co-hosted a party for the Olympics’ Opening Ceremonies with the British ambassador, clinking champagne glasses at the embassy in front of hundreds of government officials and lobbyists.
“David takes an eternity and a half to leave the ballroom,” said David Bradley, head of Atlantic Media and a longtime college friend.
Those connections have added to Cohen’s powerful circle of friends among top Democratic leaders.
In June 2011, Cohen and his wife, Rhonda, hosted a campaign fundraiser for President Obama at their sprawling Philadelphia home, raising an estimated $1.2 million. Amid 120 high-paying donors, Obama thanked the Cohens, whom he called “great friends.” The Cohens have contributed $877,000 of their own money to various political campaigns in the past decade. Comcast as a company has doled out $3.3 million this year to congressional campaigns, according to the Center for Responsive Politics.
There are even rumors that Cohen could be tapped for a top White House role if Obama is reelected. But he is coy when asked whether he is interested in reentering politics.
“Sorta, no,” Cohen said. “I have the best corporate job in the world, one that combines everything I love about business and government. ”
That may be a recognition of his limited fame, which does not register outside Washington.
Last month in the District, Cohen spoke in front of an auditorium of Kramer Middle School students (and television cameras) about the program to provide Internet service to low-income Americans. He pointed to oversize props of bar charts and maps of Internet-connected homes in the city.
“Broadband is the civil rights issue of our time,” he said.
Most students were politely quiet. Some yawned, while others were led away by school staff members for being disruptive.
Then Cohen changed the mood by introducing Mayor Vincent C. Gray (D), who lauded his “friend” Cohen and Comcast’s service in the city.
The students awakened, jumped to their feet and cheered for Gray.
Behind closed doors, the fastidious Cohen commands the room. His ammunition comes from those same charts, statistics, studies and talking points.
Each morning, he creates a fresh three-ring plastic binder containing dozens of tabs to organize the data of the day. Cohen carries those binders to meetings with government officials, ready to throw out a statistic or study to support his company’s cause. He has amassed a library of the binders over the years, so many that he has had to stash them in a storage locker.
“David is intellectually omnivorous,” said Amy Gutmann, president of the University of Pennsylvania, where Cohen serves as chairman of the board of trustees. “It’s extremely important to have people like David who appreciate what politics is at its best and who get things done. That combination is very rare.”
He has been like that since as early as college, friends say. At Swarthmore College, the ambitious junior produced a 300-page report after surveying 200 students about their top concerns. He was chief aide to Bradley, the newly elected student body vice president. And he wanted his boss to look good.
“At age 21, I had never seen anything like it. Now, age 59, I’ve never seen anything like it,” Bradley said. “The sheer scale of effort and mastery were remarkable.”
Cohen brought his binders to merger negotiations at the FCC, a place that runs on thick policy papers. He would rattle off data on online video traffic, city-level cable subscriber numbers and the rankings of local television stations.
“Every meeting with David is incredibly substantive,” said Eddie Lazarus, former chief of staff to the FCC. “He always comes with a willingness to find solutions.”
One of those solutions was to offer the low-income Internet service just when Comcast wanted to buy NBC Universal.
The initiative may not have sealed the FCC’s decision to approve the NBC merger. But it helped, Cohen said.
The proposal clearly captured the fancy of regulators. Late last month, Genachowski, the FCC chairman, touted the program, seemingly claiming some credit for its creation.
“This particular program came from our reviewing of the Comcast NBC-U transaction,” Genachowski said in a speech. “Comcast embraced it as good for the country, as well as good for business. And I’m fine with that.”
It’s a fuzzy detail Cohen is happy to overlook.