What Are Politicians Saying About Comcast/Time Warner Cable? (Part III)

With both the Department of Justice and the Federal Communications Commission reviewing Comcast’s acquisition of Time Warner Cable, many elected officials are weighing in on the potential benefits and pitfalls of the deal. Comcast has noted that nearly 70 mayors and more than 60 additional state and local officials have gone on record as proponents of the proposed merger.

In August, Philadelphia Mayor Michael Nutter (D) organized a diverse national group of 51 mayors who support Philadelphia-based Comcast's proposed $45 billion acquisition, saying the deal would lead to significant economic benefits in the communities, including jobs. In Pennsylvania, the mayors of Bensalem, Media, Lancaster, and York signed on to a letter sent to the Federal Communications Commission. The New Jersey mayors of Camden, Bridgeton, Lambertville, and Trenton also signed on. Outside Comcast’s home region, the mayors of Orlando (FL), Columbia (SC), Stafford (TX), Attleboro (MA), Denver (CO), and Anaheim (CA) lent their support.

"I proudly and enthusiastically support this business transaction because Comcast has always been a great corporate citizen in Philadelphia and I thank my fellow mayors for joining me," Mayor Nutter said. "The merger of Time Warner Cable and Comcast will lead to improved services and increased investment in existing Comcast markets." When asked whether Comcast had requested the letter of support, Nutter's spokesman, Mark McDonald, said, "I have no idea." He said that Mayor Nutter phoned and e-mailed mayors he knew through the years.

Absent from the Nutter letter were the mayors of New York City and Los Angeles, two cities that could be most affected by a Comcast/Time Warner Cable merger. Both of those TV markets are served by Time Warner Cable.

Los Angeles Mayor Eric Garcetti (D) wants the FCC to examine the stalemate between Time Warner Cable and other pay-TV operators that's prevented much of the region from watching Dodgers baseball this season. A combination of the two companies would make Comcast the dominant pay-TV operator in the Los Angeles region with 1.8 million customers. Mayor Garcetti stopped short of asking the FCC to demand resolution of the Dodgers channel impasse as a condition for the government's approval of the deal. But the mayor did ask the FCC to delve into programming disputes and "determine why the problem has not been resolved already, and then ask Comcast to show that the merger would alleviate, and not exacerbate, problems of this sort." Garcetti also asked the FCC to require Comcast to continue to follow so-called net neutrality guidelines to treat all Internet traffic equally. He also requested that the FCC encourage Comcast to increase its commitment to provide low-cost Internet service to more low-income families.

New York Mayor Bill de Blasio (D) submitted comments http://apps.fcc.gov/ecfs/comment/view?id=6018316739 to the FCC calling for several conditions on the deal. One of de Blasio’s primary concerns is that a merger of the two cable and Internet giants would make it more difficult to bring high-speed internet access to all people in New York City. To that end, Mayor de Blasio suggested several requirements for the new, combined company as conditions for allowing the merger, http://variety.com/2014/biz/news/new-york-mayor-calls-for-conditions-on-... including:

  • An expansion of Comcast’s Internet Essentials program, designed to extend broadband access to low-income residents. De Blasio wrote that the barriers to entry -- based on whether a household has a child in a school lunch program -- are too narrow. He also called on Comcast to increase upload and download speeds, and to expand its range of lower cost offerings for households that do not qualify for the program.
  • Greater transparency on rates. De Blasio cited an FCC report that cable rates have expanded at more than twice the rate of inflation over the past 17 years. He wrote that “one analysis suggests that Time Warner Cable customers have been confronted with bills containing charges that are over 20 percent higher than advertised prices,” and called for accurate information that explain discrepancies between advertised rates and actual charges.
  • Improved customer service. De Blasio noted that Time Warner Cable has the highest ratio of complaints to cable subscribers among all New York franchises. He called for Comcast to make “concrete, measurable improvements in customer service,” with quarterly reports on progress.
  • Network neutrality. Comcast is bound by net neutrality rules as a condition of the NBC Universal merger in 2011, and says that it will extend the provisions to TWC customers. De Blasio is calling for Comcast to pledge its “full support for FCC adoption of the strongest possible rules to prospect and promote the open Internet across the industry.” He also urged Comcast to drop its opposition to the reclassification of broadband as a telecommunications service, something that would give the FCC greater oversight.

“A series of similar mergers has already reduced competition in the cable and broadband sectors, leaving Americans vulnerable to increasing rates and declining customer service,” Mayor De Blasio wrote. “Comcast and TWC operate cable networks in distinct non-overlapping geographic markets. Nonetheless, the vertical integration resulting from this transaction may reduce competition between distributors and programmers, with Comcast potentially favoring its own programming and requiring bundling agreements.”

De Blasio said that the city has engaged in a “constructive dialogue with Comcast” but they still have concerns.

While Comcast has already said a benefit of the merger will be its ability to improve the TWC network, De Blasio is calling for “time-bound” commitments that 100% of its network will be upgraded to fiber-optic cable by July 2020. He’s also calling for Comcast to “illustrate its dedication to the public interest” by expanding free Wi-Fi hotspots within a quarter mile of 20% of residences in TWC’s service area by 2020.

On August 22, Chicago Mayor Rahm Emanuel (D) wrote the FCC saying he believes the merger would be good for the city, maintaining and enhancing Comcast’s “generous presence” in the area. But, the International Business Times pointed out on September 2, Emanuel and political committees he controls have received more than $100,000 from Comcast and its employees during the course of his political career.

For example, during his time running for and serving as mayor of Chicago, Emanuel has received large campaign contributions from Comcast and its employees, including from Comcast Executive Vice President David Cohen, who contributed $5,000 to Emanuel’s mayoral campaign in February 2011. Cohen also contributed $10,000 to the Chicago Committee, which the Chicago Tribune has described as Emanuel’s “other political fund (which) he uses for political activities that support his policy initiatives at City Hall.” In all, records from the Illinois State Board of Elections show Emanuel’s mayoral campaign and his other municipal political organizations have received $50,000 from Comcast employees since he began running for mayor in 2010. Similarly, Comcast was also one of the top donors to Emanuel’s congressional campaigns, giving $46,000 to Emanuel between 2003 and 2008. Additionally, employees of Comcast made more than $25,000 worth of contributions to the Democratic Congressional Campaign Committee when Emanuel chaired that organization.

On August 22, ars technica reported that Comcast-TWC is getting lots of support -- from politicians and organizations that benefit from its political and charitable donations:

  • The Democratic Governors Association asked the FCC “to consider Comcast’s impressive body of work and all that they do in helping strengthen the middle class and investing in our nation’s infrastructure.” Comcast gave $225,000 to the Democratic Governors Association this year.
  • Illinois State Rep. Fred Crespo (D) praised Comcast’s Internet Essentials program while throwing his support behind the merger. (Comcast is keeping a large majority of its territory in Illinois, including Crespo’s district.) Comcast gave Crespo $14,000 between 2006 and 2012.
  • Illinois State Rep. Brandon Phelps (D) also wrote in support of the merger. He praised “Comcast’s ongoing commitment to a free and open Internet” and wrote, “the additional economic opportunities a combined Comcast and Time Warner Cable could generate are exciting to think about.” Phelps' district at the southern tip of Illinois is not served by Comcast, but he received $4,000 from the company in 2011 and 2012.

At the national level, one voice has consistently raised concerns about Comcast’s growing influence. Senator Al Franken (D-MN), a leading opponent of Comcast's proposed acquisition of TWC, told the FCC that the deal would give Comcast too much market power. He said he’s counting on the FCC to protect the public interest and reject the deal. "Comcast's proposed acquisition of Time Warner Cable would position Comcast as a veritable gatekeeper over vast swaths of the nation's telecommunications industry, resulting in higher prices, fewer choices, and worse service for consumers in Minnesota and across the country," Sen. Franken said in his public comments to the FCC. "The proposed acquisition also would threaten innovation and economic activity on the Internet, and it would jeopardize the free flow of information and ideas on which our democracy depends. Because the proposed acquisition does not advance the public interest -- but, rather, is inimical to it -- it must be rejected."

A decision on the Comcast-Time Warner Cable transaction is not expected until early 2015. We're tracking the review -- and we'll see you in the Headlines.

Looking for more of the debate on Comcast/TWC? See Part I and Part II of this series.

By Kevin Taglang.