WASHINGTON — Executives from
Comcast and Time Warner Cable faced vigorous opposition to their proposed
merger on Thursday, as a House antitrust panel heard statements from cable and
Internet company executives that the merger would hurt competition.
A similar hearing before
a Senate panel last month failed to produce much in the way of acrimonious
debate. But the House panel, led by Republicans who are often sympathetic to
business interests, has included on the witness list several vehement opponents
of the merger.
Those witnesses emphasized what they said were the negative
effects of the merger on competition in the market for cable television and
high-speed Internet service.
“This merger is bad news for the cable industry,” Dave
Schaeffer, chief executive of Cogent Communications, said in written testimony,
highlighting one of the reasons that he believes Comcast’s proposed acquisition
of Time Warner Cable should be blocked.
“But this merger is less about cable than it is about the future
of the Internet,” he said. Cogent, one of the largest Internet infrastructure
companies, said that Comcast’s control of the NBC broadcast network, a slew of
cable television channels, the largest collection of cable subscribers and the
biggest collection of high-speed Internet customers, showed that “Comcast’s
strategy is to get everyone to pay them.”
Patrick Gottsch, founder of
RFD-TV, which offers multimedia content “dedicated to the Western lifestyle,”
said that he also opposed the merger, because continued consolidation in the
cable industry threatened the choices and diversity in rural independent
David L. Cohen, a Comcast executive vice president who has been
the company’s leading public advocate for the deal, said he understood the
opposition but it was misguided.
“We expect some of the witnesses to raise questions about two
big companies’ combining,” Mr. Cohen wrote in a company blog post on Thursday. “And while the questions are
legitimate, most of them are not specifically tied to this transaction — they
really raise questions that need to be considered as part of an industrywide
“Putting any emotion aside, this transaction must be viewed by
reference to the facts, sound economic theory and the law,” Mr. Cohen wrote.
“And on that basis, we believe that any anti-competitive risks are soundly
outweighed by the pro-consumer benefits.”
Representative Spencer Bachus, an Alabama Republican who is
chairman of the antitrust subcommittee, said in an opening statement that while
size alone does not necessarily lead to anticompetitive behaviors, “it can
result in an ability to influence markets in anticompetitive manners.”
If the companies combined, the new entity would be the primary
pay television provider in 37 of the top 40 markets, Mr. Bachus said, and would
account for 40 percent of the nation’s broadband customers.
Nevertheless, he added, companies including Comcast have
invested heavily in new technologies, to the benefit of consumers. “There are
those who remember when you could count on your fingers the number of
television channels you could view,” Mr. Bachus said. No longer, he added: “If
there is any industry in America that has undergone a revolution in the past 20
years, it is the cable and video business.”
Click here for the original article in the New York