Yesterday, I predicted that Comcast would have a tough time getting regulatory approval for its purchase of NBC Universal. Having a distributor control broadcast content, even indirectly, would set off warning bells in Washington in any administration, let alone one as interventionist as the Obama White House. The Washington Post reports that Comcast’s acquisition already has Congress and the federal government sounding skeptical at best:
Comcast, the nation’s biggest cable and broadband Internet company, on Thursday announced plans to take over NBC Universal, creating a new kind of media colossus that would not only produce some of America’s most popular entertainment but also control viewers’ access to it.
The roughly $30 billion deal set off immediate reaction from consumer groups and lawmakers in Washington, heralding an epic regulatory battle over concentrating so much power in one company. Almost one in four cable subscribers in the U.S. is a Comcast customer. NBC Universal owns cable networks such as Telemundo, MSNBC and Bravo, TV shows such as Jay Leno’s, regional stations such as Washington’s WRC (Channel 4), and Universal movie studios.
Sens. John D. Rockefeller IV (D-W.Va.), chairman of the Commerce Committee, and Herb Kohl (D-Wis.), chairman of the Judiciary antitrust subcommittee, called for hearings to review the deal’s impact on television competition and consumers. Michael J. Copps, a Democratic member of the Federal Communications Commission, said that the merger faces a “very steep climb with me” and that it raises many doubts over whether it would be in the public’s interest. …
The FCC will review the deal to see whether it benefits the public. Antitrust watchdogs at the Justice Department or Federal Trade Commission will scrutinize whether it would harm competition in the market.
Of course, the FCC, the DoJ, and the FTC are all part of the executive branch. How will Comcast go about making the Obama administration more comfortable with its benign intentions in controlling both content and distribution of entertainment and information? Noel Sheppard thinks he’s found one particular strategy:
On the same day Comcast announced it was buying a 51 percent stake in General Electric’s NBC Universal, its CEO sent a letter to President Obama supporting the Senate’s healthcare bill.
At virtually the same time, high-ranking Democrats in the House and Senate said Thursday they will closely scrutinize the proposed alliance to determine its impact on the media marketplace.
Here’s the letter:
Dear Mr. President: […]
Because of our announcement today that we have formed a joint venture with General Electric consisting of NBCU’s businesses and Comcast’s cable networks, I am unable to attend the Summit. I very much appreciate the outreach to the business community, and want to express one of the thoughts I intended to make at the Summit — that enactment of comprehensive health care reform legislation is, in my judgment, critical to putting this country on a path of sustained growth and prosperity.
As the nation’s largest cable and broadband company with over 100,000 employees in 36 states and the District of Columbia, we are proud to offer health insurance to all Comcast employees. But sadly, there are millions of Americans who simply cannot afford to get sick, as health coverage gets increasingly difficult to secure and the resultant demands placed on federal and state budgets are enormous. This cycle is not sustainable.
While there has been much controversy and debate over hundreds of provisions and alternatives, it is my view that the current legislation pending in the Senate provides a workable framework for this country to take an important step toward enhancing health care accessibility, promoting operational efficiencies and technological innovation, and reducing the cost of health care and the federal deficit. My support of meaningful health care reform is buttressed by the estimate by the Congressional Budget Office that, while the Senate legislation would cost $848 billion, it would also reduce budget deficits by $130 billion over the next decade. A strong dose of fiscal responsibility will be essential to achieve meaningful health care reform and lasting economic recovery. […]
I want to commend you for your dedication to health care reform and for the remarkable progress that has been achieved in this area under your leadership. We cannot allow perfection to stand in the way of critically needed and very good legislation, which is why I support your efforts. Comcast stands ready to assist you and this nation in the effort to enact sensible health care reform. We also look forward to working with your Administration to make health care information technology the best in the world.
Perhaps the specific timing is coincidental, but the effort does seem like apple-polishing, and perhaps not primarily for the merger. Comcast is at the center of the net-neutrality debate, too. The effort to get on the administration’s good side may have more to do with that battle than with smoothing the path of a merger, but this won’t hurt their chances, either.
It seems to me that one presidential candidate made a point of arguing against corporate influence on Washington. That must only apply for those corporate influences that dissent from the administration’s point of view. In any case, Brian Roberts appears to be covering his bases, but to what effect? We shall soon see. If the White House lets this merger go through, it’s going to make it nearly impossible for them to argue for a revival of the Fairness Doctrine or emphasize local control of broadcast stations.