Opponents line up against Comcast-NBCU merger

Last week, Comcast Corp.'s chief executive officer, Brian L. Roberts, smiled at a seated crowd of congressional staffers and policy wonks at an Internet convention at Washington's Hyatt Regency and said he loved being in the nation's capital.

On Thursday, the cable mogul will appear before a group that may not be as friendly.

That is when Roberts and Jeff Zucker, chief executive of NBC Universal Inc., will testify before two congressional subcommittees on the proposed $30 billion merger of the companies.

The deal faces criticism that it could lead to higher cable TV rates, harm competition, and stifle online innovation. Comcast says it won't.

Lobbying has been heated on both sides of the issue. About 25 groups have formed a loose alliance in opposition to the merger.

"Comcast is the largest media company in the nation and can burn money on disputes that other companies can't," Matthew Polka, president of a trade association for small cable companies, said Friday. "It's the temptation to self-deal, for the conglomerate to use its assets to its benefit and to hurt competitors."

Polka's American Cable Association, representing companies with seven million cable subscribers, is part of a 25-member coalition that includes Common Cause, the Communications Workers of America, the National Organization for Women, the Parents Television Council, the Sports Fan Coalition, and the Satellite Broadcasting and Communications Association.

Last week, Polka said, he visited the offices of about 10 federal lawmakers, and he plans to meet with more.

Congressional interest is high because of the sweep of the Comcast-NBCU deal and the fact that the merged company would reach directly into about 100 million homes through its cable-delivery system and its entertainment and news programming. NBC Universal's cable networks include MSNBC, CNBC, Bravo, and No. 1-rated USA.

But antitrust lawyers still say they believe regulators and the Federal Communications Commission will approve the merger, though perhaps with conditions.

Evan Stewart, a senior partner with the New York firm Zuckerman Staeder L.L.P., said the federal government would likely OK the deal because NBC is a fading network and the TV audience is so fragmented when compared with the 1950s and '60s, when the big three networks - ABC, CBS, and NBC - dominated the viewing audience.

Antitrust regulators seem to be focusing on the vertical integration of the businesses rather than on cable pricing, Stewart said, adding: "At some point, regulators will have to face that issue."

Comcast has a plan for crossing the finish line with NBC Universal. Last week, the Philadelphia company filed a 145-page public-interest statement with the FCC, saying the merger could lead to more diverse entertainment choices for consumers, boost local TV news, sharpen competition, and promote "new media" innovation.

Roberts has visited the offices of the committee members who will hear his testimony this week, Comcast said Friday.

The company has said it intends to preserve the free-over-the-air NBC broadcast network and the editorial independence of NBC News.

In its public-interest statement, Comcast said that NBC stations were allowed to report on General Electric Co., the entertainment company's parent, without interference. GE also employs an ombudsman, David McCormick, who holds the title of vice president of standards at NBC and is an adjunct journalism professor at Columbia University, to ensure the independence of NBC Universal's news operations. Comcast said it would continue those practices.

On Capitol Hill this week, Roberts and Zucker will appear before the House Subcommittee on Communications, Technology and the Internet, and they will testify separately before the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights.

Some expect lawmakers to take the opportunity to ask Zucker questions about the flap between late-night hosts Jay Leno and Conan O'Brien instead of focusing on merger details.

Among the panelists at the House subcommittee hearing will be Mark Cooper, research director for the Consumer Federation of America. According to a list circulating in Washington Friday, other panelists will be Colleen Abdoulah, president of Wide Open West, a cable overbuilder that competes with Comcast in Detroit and Chicago; Michael Fiorile, chairman of the board of independent NBC-TV affiliates; and Adam Thierer, president of the Progress and Freedom Foundation.

Comcast would not comment on the hearings.

Polk said the American Cable Association's members are concerned about prices for entertainment and news in the aftermath of the merger, as well as access to programming such as regional sports networks.

Small cable operators pay 30 percent or 40 percent more for entertainment and news than Comcast does, Polka said, because they do not have the negotiating clout. He fears that situation would worsen if Comcast merged with NBC Universal.

Comcast will have more power to negotiate prices and carriage deals for its entertainment and news programming, he said, which could result in cable subscribers getting more channels they are not interested in.

"Realistically, we think this merger will be approved," Polka said. "Most mergers are. But we need to demonstrate the harm to consumers and competition so that appropriate conditions can be placed on the merger."