Barbecue season continues for Comcast (NASDAQ: CMCSA) as the House Judiciary Committee is next in line to put the MSO on the spit and apply a little heat about its plan to acquire Time Warner Cable (NYSE: TWC) for $45.2 billion.
Many of the same players who appeared before the Senate Judiciary Committee when that body heard comments on the deal were expected to be on hand for the House hearing, including American Cable Association President-CEO Matt Polka, Columbia Law School professor C. Scott Hemphill, antitrust lawyer Allen Grunes, Rural Media Group Founder-Chairman Patrick Gottsch, Cogent Communications Founder-CEO Dave Schaeffer and DeepField Networks, Inc. Co-Founder-CEO-and President Craig Labovitz.
Most, if not all, will raise points why the merger should either not happen or should happen in a qualified manner with restrictions that go beyond those that Comcast has already offered, such as selling off subscribers to Charter Communications (NASDAQ: CHTR) and setting up a new cable company to handle others.
On the other side of the table, Comcast EVP and Chief Diversity Officer David Cohen and Time Warner Cable Chairman-CEO Robert D. Marcus will be trying to convince the congressmen that the deal is good for U.S. consumers.
"Specifically," Cohen wrote in a Comcast blog post, "Comcast will bring Time Warner Cable residential customers faster Internet speeds, more programming choices, more robust Wi-Fi and our best-in-class X1 entertainment operating system."
Cohen also warned that "emotion" should not come into the discussion of merging the nation's largest cable operator with the second largest.
"This transaction must be viewed by reference to the facts, sound economic theory and the law," he said.
One of the concerns sure to be expressed is that Internet traffic carriers such as Cogent and content providers such as Netflix fear a larger company will adversely affect their operations by demanding fees to carry traffic to their customers. Another, as voiced by Grunes in a Philadelphia Inquirer story, is whether Comcast will get approval for the deal and then return several years later wanting to acquire yet another cable operator and get even bigger.
"What's to stop them?" Grunes asked in the newspaper story.
A final consideration is how the deal will affect a crowd of increasingly discontented rural subscribers who feel that the digital divide is becoming a digital chasm that they will never be able to breach. That breach also includes content that these consumers find relevant.
"With Comcast controlling the access to 30 million cable homes post-merger, 23 of the 25 top urban markets and having a presence in 40 of 50 states, this is a critical time for not only our own programming but also the 146 independent producers who depend on our networks for their distribution," Patrick Gottsch, founder of RFD-TV said in a press release.
Gottsch, who was scheduled to testify, pointed out that "the flow of information between urban and rural America must be a two-way pipeline so that there is not a barrier between city and country interests."
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