WASHINGTON -- Executives from Comcast and Time Warner Cable faced opposition to their proposed merger 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 vigorous debate. But the House panel, led by Republicans who are often sympathetic to business interests, has included on the witness list several 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 he believes that 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 programming.
David 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," Cohen wrote in a company blog post 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 industry-wide proceeding.
"Putting any emotion aside, this transaction must be viewed by reference to the facts, sound economic theory and the law," Cohen wrote. "And on that basis, we believe that any anti-competitive risks are soundly outweighed by the pro-consumer benefits."
Rep. Spencer Bachus, R-Ala., chairman of the antitrust subcommittee, said in an opening statement that while size alone does not necessarily lead to anti-competitive behaviors, "it can result in an ability to influence markets in anti-competitive manners."
If the companies combined, the new entity would be the primary pay television provider in 37 of the top 40 markets, Bachus said, and would account for 40 percent of the nation's broadband customers.
Nevertheless, he said, 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," Bachus said.
That is no longer true, he said.
"If there is any industry in America that has undergone a revolution in the past 20 years," he said, "it is the cable and video business."
Business on 05/09/2014