City Year

Comcast has repeatedly said the biggest reason US regulators should approve its $45.2 billion purchase of Time Warner Cable (TWC) is that the two companies do not compete against each other. While Comcast has more than 21 million customers and TWC has more than 11 million, there isn’t a single city or town in America in which the two companies both offer video and Internet services.
At a Senate Judiciary Committee hearing today, Sen. Al Franken (D-MN) said that Comcast made a very different argument in order to secure approval of its 2011 purchase of NBCUniversal. During a hearing in 2010, Comcast argued that competition from Time Warner would prevent it from taking unfair advantage of increased ownership of television content. Franken said:

Comcast has argued that there’s nothing to worry about here because it doesn’t compete with Time Warner Cable in any ZIP code… When Comcast wanted to acquire NBCUniversal, Comcast’s CEO told this committee not to worry about it because there were still other robust distributors, and he specifically named Time Warner Cable, which would prevent Comcast from setting anti-competitive prices for Comcast content.
The point was that Comcast couldn’t get away with that sort of behavior because distributors including Time Warner Cable wouldn’t stand for it, and they could go to the FCC and complain about it, too. Later in the hearing, Comcast’s CEO also told us, ‘We are not getting any larger in cable distribution here.’ Well, if this deal goes through, Comcast will become larger in cable distribution, and if this deal goes through, Comcast never again will have to negotiate with Time Warner Cable when it comes to setting prices for NBC content. And NBC content, everyone should remember, is 20-some networks.
Comcast can’t have it both ways. It can’t say that the existence of competition among distributors including Time Warner Cable was a reason to approve the NBC deal in 2010 and then turn around a few years later and say that the absence of competition with Time Warner Cable is a reason to approve this deal.

According to a transcript of that February 2010 hearing, Comcast CEO Brian Roberts was asked by Sen. Herb Kohl (D-WI), “Won’t Comcast have the incentive to raise its rivals’ costs by raising the cost of NBC programming if this merger is completed?”
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