It’s not just consumers who dislike Comcast and Time Warner Cable. Turns out the cable companies are unpopular with Congress, too.
In a Senate hearing Wednesday, lawmakers grilled company executives about their proposed $45 billion merger, expressing doubts that the resulting mega-company would improve on its parents’ long history of combining high rates with poor customer service.
“I believe this deal will result in fewer choices, higher prices and even worse service for my constituents,” said Sen. Al Franken (D-Minn.), who urged federal regulators to block the deal.
In their prepared remarks, Comcast executive vice president David Cohen and Time Warner Cable chief financial officer Arthur Minson focused on the benefits of the proposed marriage, as well as all the reasons why it would not violate federal antitrust laws.
Cohen argued that, together, the firms could better compete against a slew of Internet firms such as Netflix, Apple and Google. And with a national footprint, Cohen said the merged companies could more quickly deploy faster Internet service.
The two companies combined would control 30 percent of the paid television market and 40 percent of the broadband Internet market.
But lawmakers quickly turned the conversation to the impact on consumers. Several Democratic senators wanted to know why the cable giants couldn’t deliver faster Internet connections without a merger.
“What we’ve heard is a general sense of skepticism by my colleagues — which is reflected in the general public — about how this deal will really help consumers,” said Sen. Richard Blumenthal (D-Conn.), adding that cable bill prices have increased about three times the rate of inflation over the past few years.
“Where’s the beef?” Blumenthal said. “Apart from vague, potential promises of good things happening, the case has yet to be made that consumers will benefit in a tangible and substantial way.”
Cohen said he couldn’t promise to reduce prices after the merger. And he admitted the firm has had trouble improving customer service.
“It bothers us that we have trouble delivering real high-quality service on a consistent basis,” Cohen said.
Cohen added that the company is willing to accept conditions on the merger that would foster competition with television networks and other telecommunications firms. He also promised to accelerate the delivery of low-cost broadband service to more low-income households.
But critics of the deal said Comcast has grown too big already. Sen. Amy Klobuchar (D-Minn.) said several independent television programmers have privately expressed concerns about the merger, saying they fear that a more powerful Comcast would have an outsized influence on the entire industry.
“What will happen to the next Netflix that today is just a dream in a garage?” Klobuchar said.
At the hearing, Back9Network, a golf lifestyle channel, said it had been in negotiations with Time Warner Cable to carry their shows. But when the merger was announced, talks “stalled.”
Because Comcast has a competing golf channel, Back9Network CEO James Bosworth said, he worries “the incentive is for the merged company not to carry us.”
Minson and Cohen scoffed at the claims, saying they are in talks with many programmers, including Back9Network. But some lawmakers questioned their promise to treat smaller competitors fairly.
Three years ago, when Comcast chief executive Brian Roberts testified before Congress about its then-pending merger with NBC Universal, Roberts said Time Warner Cable offered important competition. Now, Franken noted, Comcast argues that Time Warner Cable isn’t a a competitor at all.
“You can’t have it both ways,” Franken said.
Analsyts say the merger is likely to pass muster with antitrust regulators, but public concerns about a nationwide cable and Internet giant could create stumbling blocks with the Federal Communications Commission.
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