Comcast's fast-growing Washington presence
The tale of Comcast’s remarkable rise in Washington tracks the story of how the cable giant built its business. In the same way that it aggressively grew its empire by acquiring one cable system at a time, the company has methodically added one lobbyist after another and steadily spread more money around the nation's capital as its interests expanded beyond the television screen.
Now the nation’s biggest cable and Internet service provider, Comcast’s relatively new but highly visible presence here comes into focus just as a long regulatory review begins of its proposed $30 billion merger with NBC Universal. If completed, the deal would transform Comcast into a media and Internet giant just as the Web threatens to throw the cable and media businesses into turmoil. In effect, the company's hopes to turn itself into Comcast 2.0 lie in the hands of federal officials.
Beyond Comcast's sheer size, some observers and telecom policy insiders say that the company’s aggressive and sometimes combative approach has occasionally bothered key constituents in Washington’s communications and tech circles. That style has come to define the cable giant: a relentless push for policies and a willingness to wage marathon battles to prove its point. It is already suing one of the federal agencies that is reviewing the NBC merger. It pushes back against consumer groups on multiple issues, and those groups have turned their attention to blasting the NBC deal.
Comcast says that with its growth has come greater attention and responsibility. The company is more visible because it is often the voice representing the whole cable industry.
“It’s sort of like a bicycle race. The trade association and biggest company take the lead on most issues,” said David Cohen, executive vice president for Comcast.
But even with a new administration and a fresh start after a difficult relationship with the Bush-era leadership of the Federal Communications Commission, critics say the company hasn’t let up. And the NBC merger will be a test for the White House.
“The Obama administration has declared to change politics as usual in Washington and this is a perfect place to start,” said Mark Cooper, director of research at the Consumer Federation of America. “This goes to the character of the company, because there are too many examples of double talk by this company, which makes you wonder: how do we know they will even keep their promises on commitments to the merger?"
On Thursday, Roberts and NBC Universal chief executive Jeff Zucker will appear before two Congressional hearings. Lawmakers are expected to grill the executives on how a merged media and cable and Internet distribution giant could affect broadcast and cable competitors.
Consumer groups say there is danger the merged company would put a higher priority on NBC shows and movies than on programming produced by competitors, and charge higher rates to broadcast stations and cable operators for that content.
Lawmakers are also expected to ask if the merger would lead to job cuts or reduce the strength of unions. And they will explore how the merger could affect consumers' future sources of entertainment -- particularly the Internet -- and whether Comcast would keep must-watch shows such as Top Chef on Bravo and The Tonight Show from upstarts such as Roku and Vuze. Congressional staffers said that members have received phone calls from local leaders in their districts, urged by Comcast, asking them to "be nice" to the company during hearings.
The deal also is expected to draw close scrutiny from regulators. The Justice Department will review it for potential competitive harms, while the FCC will scrutinize the merger for its effect on consumers and competition.
Comcast said it expects a tough review but asserts that the deal will benefit consumers with more local broadcasting and more investment in NBC Universal’s content.
“People who would like us not to be successful are unhappy with how good we are at advocating our industry and positions,” Cohen said.
Adam Thierer, president of the Progress & Freedom Foundation, a free-market think tank, notes that phone giants AT&T and Verizon have had a longer history in Washington but Comcast now ranks among them in terms of influence.
Indeed, Comcast has become one of the bigger meal tickets in Washington, on its way to spending more $12.5 million this year in lobbying, more than six times the amount it spent around the time of its last major merger, the 2002 acquisition of AT&T’s broadband Internet business.
The company has built an army of in-house and outside policy experts and lobbyists and relies on a powerful trade organization with deep reach within the federal government. Over the past year, it hired Rudy Brioche, a staffer of former Democratic FCC Commissioner Jonathan Adelstein, to work on communications policy. Peter Filon, who was an aide to former House Commerce Committee Chairman John Dingell (D-Mich.), joined the firm to lobby Congress.
“The optics are bad for Comcast because they are the big dog and the issues in the wheel house that are central to them need to be litigated which makes them look more aggressive,” Thierer said.
Comcast has said there is no incentive to keep NBC’s content from competitors. Thierer said there is lots of competition among companies that deliver paid-television services and online distributors including YouTube, which dominates the space.
“There has never been so much competition for our eyes and ears,” said Thierer, who is recommending that regulators approve the merger.
Despite its fast-growing influence, Comcast is relatively new to Washington. It hired its first lobbyist about the time of the AT&T deal in 2002. The company's first point person to lobby the FCC, Kathy Zachem, was hired in February 2008, amid Comcast’s high-profile battle over allegations it had blocked a Web application, BitTorrent, from its Internet networks. The episode has become the subject of a wider debate over net neutrality, and the company suffered a public relations blow after it hired stand-ins for an FCC hearing at Harvard University to act as supporters of Comcast’s defense.
“What they do is wear people out,” said John Dunbar, a former telecom reporter who now heads the Investigative Reporting Workshop at American University. “They just sue all the time and can play all different sides of an argument.”
Critics say Comcast has been inconsistent with its arguments, a point that regulators should consider when viewing the company’s promises to share television shows and movies to competitors and keep choices and rates affordable for consumers.
In one example, Comcast fought for a year against claims it blocked or slowed BitTorrent on its Internet network. Last week Roberts said the company made a mistake in how it handled that episode, admitting they slowed the transmission of that Web site. Still, the company is suing the FCC over a ruling by former FCC chairman Kevin Martin, saying that the ruling against the company isn’t enforceable and arguing that by acting on a policy statement at the FCC, the agency set a dangerous precedent.
Comcast says its lawsuit was filed in part to clear its reputation. But some observers note that by pursuing the case, the company appears to be biting the hand that feeds it as it seeks approval of its merger from the FCC with as few conditions as possible.
“It is hubris,” said Ben Scott, policy director of Free Press, a public interest group that has fought with Comcast over net neutrality. “The irony of Comcast is that if it is successful in court they will find themselves...the only broadband provider that the FCC has power over.”
February 4, 2010; 7:00 AM ET
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