Just what will a "Comcastic" lobbying budget buy you? A growing coalition of consumer groups hopes "not a new merger" is the answer.
It’s been three weeks since Comcast Corp. announced its intention to merge with Time Warner Cable. The two companies are worth more than $25 million on K Street alone, based on last year’s lobby tabs. But what remains a mystery is whether that will tip the scales in the companies’ favor.
“There’s no fix here, the fix is not in,” said Bert Foer, president of the American Antitrust Institute, which opposes the deal. “So it’s very important that the other side also be heard from. It won’t have the same kind of resources, but it may be able to generate some substantial, well-reasoned and supported arguments. And that’s one of the things you could take away from the AT&T thing.”
The "AT&T thing" refers to the telecom company’s proposed union with T-Mobile that the Justice Department blocked in 2011.
Many industry insiders say the Comcast-TWC union poses fewer anti-trust concerns than AT&T's bid for T-Mobile because the two cable carriers don’t compete head-on as much in the same markets. Like Comcast, AT&T is a big spender in Washington, D.C. Last year, it reported nearly $16 million on federal lobbying alone.
Industry lobbyists familiar with both deals say they observe Comcast approaching this merger in a much quieter, more subtle way than AT&T did.
Many of Comcast’s lobbyists are staying silent about the deal altogether, and not just around reporters. Even at social gatherings and business functions where it might seem obvious to mention the deal to lawmakers or administration officials as a way of smoothing the way forward, Comcast’s lobbyists have, in many instances, made nary a peep about it, according to sources.
“The way Comcast is approaching this is very interesting,” said a veteran telecom lobbyist. “Everybody’s writing the easy story about how many lobbyists Comcast has, but the way they’re lobbying this, they’re being very inside baseball, very surgical.”
“You can’t just buy it; you’ve really got to make the argument because if the lawyers for the government believe it’s anti-competitive, they’re not going to be bought,” added the lobbyist, who is not working for either side of the deal. “This DOJ is very insulated.”
Comcast is focusing on its work to expand low-cost broadband to disadvantaged households and is emphasizing its role as a partner with government at all levels, local to federal, to carry out that work.
On a conference call with reporters Tuesday, Comcast Executive Vice President David Cohen, who oversees government relations, regulatory affairs and communications, announced the company was extending its Internet Essentials program, which offers broadband plans for less than $10 a month to low-income families.
Cohen touted the potential expansion of the program’s reach with the combination of Time Warner Cable’s service areas including Los Angeles and New York. When asked what he planned to tell officials in Washington during a visit here the same day, Cohen said his major job in the nation's capital this week was to talk about Internet Essentials. He seemed a bit reluctant to go off topic, but noted that he’d point out the Comcast-TWC transaction would not cause any change in the competitive marketplace.
Todd O’Boyle, program director for Common Cause, said his group, which is in the process of rolling out grass-roots actions to gin up national opposition to the merger, has urged its activists to contact their local elected officials to put pressure on their congressional delegations.
The group is also circulating an online petition saying the deal ought to be declared dead on arrival. O'Boyle dismissed the Internet Essentials effort, begun when Comcast acquired NBC Universal in 2011, as “more of a good will gesture, a token measure to facilitate regulatory approval.”
Comcast has estimated that the approval process could take until this fall, though the company’s deal with NBC took more than a year to finalize. It’s primarily up to the Department of Justice and the Federal Communications Commission, but Congress can hold hearings and can lean on the administration — which is why neither side can ignore Capitol Hill. Expect the House and Senate Judiciary and Commerce panels to be where the action is beginning later this month.
Sen. Al Franken, D-Minn., wrote his second letter expressing his fears about the potential deal last week, saying “I am concerned that the proposed acquisition could result in higher prices, fewer choices, and even worse service for consumers.”
Christopher Lewis, vice president for government affairs at another consumer-focused group Public Knowledge, said that bringing together two of the largest broadband providers in the country could mean Comcast may corner that market.
“That’s our biggest concern,” he said. “They would be THE connection for high-speed broadband in many communities with this merger.” That could mean higher prices for both consumers and content providers alike, Lewis said. Similar deals to the one Comcast inked recently with Netflix — where Netflix agreed to pay Comcast for smoother operations — could become the norm.
“Big companies like Netflix can afford to pay to make sure their content gets there, but new, diverse entrants, they can’t afford what Netflix can do,” Lewis said. "The impact they could have on the broadband marketplace and all related markets is staggering."