Comcast Faces First Test over Bid for Time Warner Cable
by KYW tech editor Ian Bush
PHILADELPHIA (CBS) - For Comcast, today brings just a taste of what's to come: a Senate panel will hear testimony on its bid for Time Warner Cable as the Philadelphia-based cable and broadband giant prepares to face scrutiny from federal regulators over the $45 billion proposed deal.
The Judiciary Committee doesn't get an up-or-down vote, but it's a very public forum for Comcast to make its case.
"I've heard from literally hundreds of constituents with concerns," says Sen. Chris Coons (D-Del.). He'll be one of the senators asking questions.
"First is over customer service," he tells KYW Newsradio. "Making sure that if there is a merger that goes forward and is approved, that the quality and the level of programming, the responsiveness to customers and consumers, the respect for privacy, and the diversity and quality of the programming is at least as good as Comcast is today -- if not better -- through the merger."
The official review will come from the Department of Justice and the Federal Communications Commission. So the job of lawmakers is to get details on the record.
"We have to look at the impact going forward in terms of pricing -- how much people pay for their Internet access and cable service." Coons says. "That's one of the major concerns I'm hearing from Delawareans -- that the combined company might have so much market power that they could drive up prices."
Comcast executive David Cohen, who's set to testify today, has said that the company is "certainly not promising that customer bills are going to go down or increase less rapidly." Though in its Public Interest Statement filed on Tuesday, Comcast says the combined "companies will be able to provide more products and services at lower cost than they would be able to do on their own" and says bill-payers will benefit from better technology "without diminishing competition."
But public advocacy groups, like Consumers Union, say bigger doesn't always mean better.
"What we've seen is that consumers are already fed up with these two large companies," says Delara Derakhshani, CU's policy counsel. "According to the latest survey by Consumer Reports, Comcast and Time Warner Cable are among the worst-ranked companies when it comes to customer satisfaction and when it comes to TV service, both companies receive especially poor marks for value received for money, as well as phone and online customer support. So it would be hard to see how combining these two companies would somehow improve the situation."
Comcast argues the merger will improve products and services as it scales to compete with companies like Google, Amazon, and Netflix. But Derakhshani says a combined Comcast-TWC would have incentive to favor its own content over those very competitors.
"That includes any company that relies on Comcast types to get to subscribers. So we think there's a lot of potential to raising costs to competitors and also disadvantaging or quashing any new online competitors."
Due to Comcast's purchase of NBCUniversal, it's bound for several more years by the FCC's Open Internet Rules, which Comcast says will "ensuring an open Internet and protect customers" and that the Time Warner Cable deal would "bring Net Neutrality protection to millions of new customers across the country."
While the cable industry is in decline, it's booming business for broadband companies. So while Comcast has offered to squeeze out several million cable customers as part of the TWC deal, it would control more than a third of the nation's high-speed broadband connections. Coons says he wants to learn more about a merger's impact on that, on digital content, and especially on the local workforce.
"There are about 10,000 Comcast employees in the Philadelphia area, and more than 1200 in Delaware alone," Coons notes. "So I'm going to be asking for some assurances that the Delaware employees and the Philadelphia region more broadly isn't going to be bearing some brunt in terms of job loss as a result of this merger. It's my hope, in fact, that it'll make possible job growth in our area."
