Are Merger’s Politics Local?

The only real intrigue in the Comcast-Time Warner Cable deal is the speculation about the government regulatory approvals, but I think the media pundits are missing an important part of that picture.

We need to keep in mind the great adage from one of my early political heroes, “the Speakah,” Tip O’Neill, former Speaker of the U.S. House of Representatives in the 1970s and 1980s. He famously said, “All politics is local,” and that remains true today.

Remember that local franchising authorities must still approve the transfer of a cable franchise. Over time, federal and state law has taken some of the arrows out of the local franchising quiver, but this isn’t really about law — it’s about politics, and there the turf could still be complicated. You don’t have to look any further to see this than the two largest cities and media markets, New York and Los Angeles.

Comcast will be the dominant broadband provider in New York, the advertising industry’s hub and the home of a number of key media companies and executives from CBS to Time Warner Inc. to Viacom. The city has just elected an unapologetically liberal mayor, Bill DeBlasio, who seeks to alleviate income inequality and whose biggest single priority is a pre-kindergarten program that he hasn’t yet funded.

It’s not hard to imagine Comcast in a dialogue about broadband in the schools, enhanced emergency services (Hurricane Sandy is hardly a distant memory) and even its level of commitment to the beloved NY1 (which TWC once sought to rebrand as Time Warner Cable News). Remember — it’s about politics, not law. DeBlasio was once campaign manager for former Sen. Hillary Clinton. He may be just learning how to deploy the levers of power in New York, but he is certainly no newcomer to power politics.

L.A. has also elected a dynamic, young and progressive mayor in Eric Garcetti. Comcast has operated in the L.A. market before, but now with TWC becomes a far more powerful presence. And TWC has invested heavily in the market, especially in sports, forming new regional sports network partnerships with the revered Lakers and Dodgers. Will Comcast be willing to make the same extensive local investments as TWC? Garcetti hasn’t laid out as elaborate or ambitious an agenda as DeBlasio, but with his initiatives to enhance government efficiency and create “green” jobs already underway, it’s not hard to see how Comcast could be helpful to him and to L.A., and how the MSO might tap into that.

Every one of the cities, towns and counties that make up the proposed combination of Comcast-TWC have their own local stories, needs and important players. Of course, D.C. will have much to consider here — but it behooves all of us not to lightly dismiss O’Neill’s wisdom at a time like this.

Howard Homonoff is principal/ managing director of Homonoff Media Group, a management consulting firm focused on traditional and digital media content distribution, social media analytics and regulatory strategy.