Deep pockets for lobbying, political connections that cross borders from municipalities to the federal government, and just plain political savvy could help Comcast (Nasdaq: CMCSA) overcome opposition from consumer groups to its proposed multi-billion-dollar acquisition of Time Warner Cable (NYSE: TWC).
The latest group to oppose the transaction, Consumer Watchdog, made its points in separate letters from John Simpson, the group's privacy project director, to the Department of Justice (DoJ) and FCC claiming that a combined company "would create a media juggernaut that would stifle (competition) and hurt consumers who would ultimately pay higher prices for even worse service."
Simpson pointed out that the deal would allow Comcast to "unfairly promote its content over the content of other providers" and that a recent deal with Netflix (Nasdaq: NFLX), which has received mixed reviews even from the SVOD provider itself, delivered "troubling signs that Comcast (is) using its power to unfairly hurt content providers and limit consumers' choice on the Internet."
Comcast's savvy political actions, however, could sway the deal in a direction that Consumer Watchdog opposes and "might sell skeptical cities and states on the aggressive plan," a story in Politico suggested.
Besides investing heavily in its Philadelphia headquarters--including building a 59-story, $1.2 billion high-profile high rise--Comcast "has maintained a powerful, experienced army of local lobbyists and trade groups" to "battle back everything from a municipal broadband proposal in Washington state to a paid-sick-leave measure in Philadelphia," the story continued.
"They obviously know how to play at the state level," Edwin Bender, executive director of the National Institute on Money in State Politics said in the Politico story.
Money, he said, "gives (Comcast) the ability to make arguments about their position in the economy, the number of jobs they have, the taxes they pay (and) what their future plans are."
Rather than threaten the company's dominance, a merger with Time Warner Cable "may further grow the company's political influence within state capitals and city councils," the story continued.
Comcast spokeswoman Sena Fitzmaurice called the company's efforts on every level from local to national "important for our customers, our employees and our shareholders."
Shareholders, too, benefit from Comcast's savvy political decisions, according to a report by the Motley Fool, which looked at the nearly $19 million Comcast spent on lobbying last year.
"Academic studies and theoretical indexes both point to the superior performance of companies that lobby compared to companies that don't or to the S&P 500 index as a whole," the Motley Fool report stated.
For more:
- see this Consumer Watchdog press release
- Politico has this story
- Motley Fool has this report
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