Comcast takes bipartisan heat in House Judiciary hearing on TWC merger

Members from both sides of the U.S. House of Representatives expressed concerns about Comcast's (NASDAQ: CMCSA) proposed $45.2 billion takeover of Time Warner Cable (NYSE: TWC) during a Judiciary Committee hearing.

Democrat John Conyers of Michigan used statistics to question Comcast's dual role as a cable company and programmer. The merged company, he said, would hold a 30 percent share of the cable market, 40 percent of the broadband market, serve 19 of the 20 biggest cable markets, own a major Spanish language channel and have access to movies and television and sports programming.

"I don't know if it's resolvable," Conyers said.

Georgia Republican Doug Collins questioned the company's commitment to rural markets, especially in light of Comcast's move to reduce the number of areas where it carries rural-based RFD-TV.

"A lot of people who move from the farm to the urban area still want to be connected to the farm," Collins said.

Rural programming--and where it's shown--is a relatively new element in Comcast's ongoing battle to overcome consumer and regulatory concerns about its merger. Patrick Gottsch, founder and chairman of the Rural Media Group, which runs RFD-TV, was present at the hearings and said that Comcast dropped its channel from cable systems in Colorado and New Mexico in favor of Al Jazeera America.

"Isn't there room for one independent channel devoted to rural interests, which make up 27 million homes in this country?" Gottsch asked at the hearing, according to a story in the Washington Free Beacon. "Just one channel devoted to rural America is all we're asking for."

As has been the case throughout the process, Comcast EVP David Cohen explained the company's side.

"We carry 160 independent programming networks," Cohen said, according to 4-traders.com. "We're a company that really tries to find the niches of programming that customers in particular markets are interested in."

On the other hand, he said, geography matters.

"We are primarily an urban-clustered cable company. Even in Western states most of our consumers are in the urban area. It is our goal of providing our customers content they want to see," he said, according to Free Beacon.

In addition to rural programming, the merger received the usual complaints that a merged entity would stifle competition, such as over-the-top content from Netflix (NASDAQ: NFLX) and smaller cable operators competing for reasonably priced programming.

Finally, just the politics of the matter raised hackles and concerns. Comcast employees, family members and its PAC have donated more than $33 million to political campaigns since 1989; CEO Brian Roberts plays golf with President Obama; and Cohen is a rainmaker for the president's campaigns, the Free Beacon story said.

Comcast reportedly employs 100 lobbyists to deal with matters such as the merger, and has donated thousands of dollars to almost every member of the Senate Judiciary Committee, including outspoken critic Sen. Al Franken, a Democrat from Minnesota.

For more:
- the Washington Free Beacon has this story
- 4-traders.com has this story

Related articles:
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Shammo: No comment on Comcast-TWC, FiOS plans on track
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Senators grill Comcast, TWC execs on $45B merger plans

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