The Comcast-NBC Merger Is Set for a Capitol Hill Grilling

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Top executives from Comcast (CMCSA), the nation's largest cable company, and NBC Universal, the storied entertainment giant, are set to appear Thursday before Congress, as lawmakers and regulators examine the companies' proposed $30 billion new-media mega-merger. Critics worry the pact would put too much media power in one firm's hands, stifle local content and threaten the nascent online video market.Comcast CEO Brian Roberts will join NBC CEO Jeff Zucker to present their case before separate House and Senate committees over the course of the day. The executives are expected to argue that the deal wouldn't hamper competition, and would actually benefit the public.

That remains to be seen, but the deal would surely benefit Comcast, moving it closer to the goal of a unified content and distribution network. Under the terms of the deal, Comcast would buy a controlling stake in NBC Universal from GE (GE), the industrial conglomerate, in a transaction that would value the new entity, which will keep the NBC Universal name, at $30 billion.

Pledge To Bolster News, Local Programming

In a 136-page "Public Interest Statement," filed with the FCC last Thursday, Comcast sought to burnish its public reputation, saying the deal won't harm competition because Comcast and NBC Universal currently operate in separate markets. "Every market we operate in is fiercely competitive, including the distribution, content, and Internet markets," Comcast Senior Vice President David L. Cohen said.

Critics have voiced concerns that the proposed deal puts too much power in the hands of a single media company. In prepared testimony, Corie Wright, policy counsel for Free Press, a DC-based consumer advocacy group, said, "we warn Congress, the FCC and the public about the effects of the takeover: higher cable bills, less competition and the concentration of power in one company across multiple media markets and platforms."

Cohen said the companies "plan to tell the committees why this joint venture makes sense for American consumers and especially for Comcast and NBC Universal customers."

In an effort to placate critics who worry about the impact the deal would have on NBC News and local NBC affiliates, Cohen repeated Comcast's commitment "to enhance local news and other forms of local programming and to preserve the journalistic independence of NBC News." He also said the new company would "increase local news production by a total of 1,000 hours at the NBC owned and operated stations."

"We want to preserve the quality, and improve the quantity, of news and public affairs programming around the country -- and we're prepared to invest to do that," Cohen said.

Internet Video Concerns

Critics also worry that Comcast could use its market power to harm nascent Internet video companies. "Comcast is already the largest cable operator and broadband Internet access provider," Wright said. "Comcast will attempt to gloss over the fact that this takeover involves the elimination of head-to-head competition in the emerging online video market. If Comcast succeeds in bringing the cable model to the Internet, then consumers will lose."

Comcast has basically dismissed the online video business model and said that even if such a model were to emerge, the market would be competitive. "We don't view Hulu and Fancast as competitive -- with each other or with our cable service -- rather, they are both complementary services," Cohen said. "And in any event, we play such a small role in this market (either as a content provider or as an Internet video competitor) that it just isn't credible to conclude that we have any capacity to get in the way of the development of video over the Internet."

Comcast boasts 24 million cable customers and 16 million broadband Internet subscribers, and owns the E! Entertainment cable channel and the Golf Channel. NBC Universal owns the famous NBC network, Telemundo, 26 local TV stations, as well as CNBC, Bravo and Oxygen.

The House Subcommittee on Communications, Technology and the Internet will hold the first hearing -- scheduled to air on C-Span 3 -- at 9:30 a.m. EST. The Senate Judiciary Committee's Antitrust Subcommittee will commence a hearing at 2:30 p.m.
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