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Lawmakers press FCC, DOJ on Comcast-NBC merger

As Senate lawmakers questioned regulators about their review of Comcast and NBC Universal's proposed merger, their views on the role of those watchdogs fell largely along party lines.

Senate Republicans urged the chairman of the Federal Communications Commission and the head of the antitrust division of the Justice Department not to overextend their regulatory reach -- and to decide on the merger quickly.

Democrats said the merger is complex, could extend into numerous parts of the media landscape and deserves particularly careful review.

FCC Chairman Julius Genachowskiand Justice's Christine Varney said in the commerce committee hearing that they've begun separate reviews. But they were careful not to specifically give their views on the merger.

Sen. Kay Bailey Hutchison (R-Tex.) cautioned the regulators not to use the merger as a platform to extend outside policy objectives.

"Mergers at the commission have not stayed as narrow as they should. ... They have frequently been used as a policy proxy making forum," Hutchison said.

Genachowski said he is fighting a challenge in an appeals court that could overturn the agency's authority over broadband services. He said he is confident in the FCC's authority.

But, he added, "if court does something that requires us to assess differently … we will do that."

Hutchison responded in a later statement that a reclassification of broadband services to make them more clearly under the FCC's authority would be "an enormous mistake."

"Burdensome new regulations would starve investment and curtail innovation," Hutchison said. "I am disappointed to learn the FCC continues to think this is worthy of consideration."

Lawmakers questioned panelists including Comcast CEO Brian Roberts about how the merger would affect consumers.

Sen. Maria Cantwell (D-Wash.) said she doesn't support the merger, particularly after NBC decided to withhold its broadcast of the Olympics for some viewers. The company also allowed access to some online Olympics programming only to subscribers of paid-television services with NBC's cable, satellite and telecommunications partners. Cantwell said she was concerned those moves were a harbinger of what the combined company would do.

"At this point, I can't support the merger," Cantwell said. "Seattle is very concerned about what happened during the Olympics."

Genachowski said that within days the FCC will issue a public notice to receive comments on the proposed merger. Varney said size doesn't determine whether a merger is approved by her agency, and she pointed to the approval of the union between Oracle and Sun Microsystems. She also pointed to how Justice approaches so-called vertical mergers -- in which companies don't have significant overlapping interests. In the agency's approval of Ticketmaster and LiveNation, they were required to divest parts of their businesses and were subject to other conditions.

The regulators in charge of reviewing the mega media merger were careful not to speak directly about their views on the specific deal.

Justice will review the merger for antitrust concerns. The FCC will review how the deal would affect consumers and whether it would be in the public interest.

Varney, however, said in the hearing that the FCC has a role in reviewing competitive effects. Indeed, Genachowski said the agency has a long history -- through the Cable Act of 1992 and Telecom Act of 1996 -- to promote competition in the video market. He said recent price increases and concerns expressed by rural and smaller carriers show competition may be lacking in some video markets.

"We hear regularly from consumers about their rates," Genachowski said. "This is something that we have to take seriously."

Earlier this week, Comcast raised monthly broadband fees for some of its subscribers in the Northeast by $2.

By Cecilia Kang  |  March 11, 2010; 11:56 AM ET
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Posted by: chin123456 | March 11, 2010 8:50 PM | Report abuse

I agree with Maria Cantwell in not supporting the merger. Comcast rates are high enought and to cahrge $2.00 more a month in the northeast is robery. They just don't care about their customers.

Posted by: warrenrial | March 12, 2010 8:19 PM | Report abuse

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