Comcast Chairman Brian Roberts and NBC
Universal President & CEO Jeff Zucker faced a barrage of questions Feb. 25
in a marathon--over five hours with one break--hearing in the House Judiciary
Committee on their proposed joint venture, their third Hill visit in as many
weeks as they push for government approval of their $30 billion joint
venture.
During that time, the pair defended their records on diversity,
and in some cases pledged to do better, reiterated their pledges to keep NBC free and
over the air, and their programming available to competitive
distributors.
The hearing alternated between grillings about jobs, access
to online content, and competitive pressures to favor their own content and the
occasional rambling question, which helped push the morning hearing into
mid-afternoon.
Committee Chairman John Conyers set the tone with opening
remarks full of concern about consolidation in general. He said he had been
alarmed by the consolidation in the industry and that he thought the Justice
Department's Antitrust Division had not been effective.
While Comcast and
NBC have suggested the primarily vertical merger does not raise particular
anticompetitive concerns not already addressed by their voluntary conditions and
existing rules, Conyers said his starting point was that there were cases where
vertical mergers can be "more dangerous" than horizontal ones.
He also
said the committee needed to pay close attention to the role of the Internet in
the deal. The companies have argued that they are only a fraction of that hugely
competitive marketplace, one dominated by YouTube.
Jobs A Sticking
Point
Jobs came up frequently in the hearing, as well as Comcast's record on
labor issues. Communications Workers of America President Larry Cohen pilloried
Comcast's record, citing its takeover of AT&T Broadband in 2002 and what he
alleged were promises made to him before the deal that were not kept afterward.
Roberts countered that as far as he knew, Comcast had kept its promises, but
said he also said he wanted to look forward, and committed to fair dealings with
unions and respecting NBC contracts.
Howard Berman (D-Calif.) said it was
all about jobs for him, given that NBCU is partly in his district.
Roberts said because there was little overlap, the merger was not about
job reductions, but about growing the NBCU business to help "restore some of its
greatness." He pointed out that GE was not happy with a fourth-place NBC and
would not be able to invest in its core infrastructure business.
Zucker
said he saw the deal as a potential spur to "high-wage jobs in an economy
starved for employment." Zucker conceded that NBC needed better programming, and
said he felt more positive about the company than he has in a while given that
interest and investment by Comcast. He pointed to the tough economy for
broadcasting, even invoking the layoffs at competitor ABC News to illustrate how
tough it was, though saying he took no comfort in that news.
Competition
Called Into Question
Berman, a big proponent of curbing online piracy,
said one of the things he liked about the deal was that it would get Comcast
more involved in the content-protection side of the digital distribution
equation given that it would now own a studio, and one in his district. Roberts
agreed that the company would have a new perspective and said he understood how
crucial protecting content was.
Dr. Mark Cooper of the Consumer
Federation and Andrew Schwartzman of Media Access Project said the deal was
clearly anticompetitive. Both were reprising earlier appearances at Hill
hearings three weeks ago on the deal. Cooper said that by standard antitrust
measures, combining Comcast and NBC in the 12 markets where NBC has a station
and Comcast a cable systems raises red flags. He said the two also compete on
the news and sports fronts.
Comcast and NBCU had support for their
argument about the lack of threat from a vertical deal. George Mason University
Law Professor Thomas Hazelett said that he did not think there were any
antitrust concerns about markets where NBC owns a station and Comcast a regional
sports net. He said there were access to programming issues that predated the
merger and would be ongoing, but that he did not think the merger itself
increased market power at a level that prompted antitrust
concerns.
Conyers was given the opportunity to commit to further hearings
by Rep. Sheila Jackson Lee (D-Tex.) who said she would like to see one or two
more hearings. But Conyers would only say that there would "undoubtedly be
future discussions about the matter."
It is ultimately the Justice
Department and the Federal Trade Commission that will decide if and how the
merger goes through, a process that is expected to take most of this
year.
