Comcast-NBC deal finds campaign cash converging with Obama’s principles

By Kim Hart - 12/05/09 07:49 PM ET

The proposed merger of Comcast and NBC Universal will be the first big test of the Obama administration’s stance on the hot-button issue of media consolidation.

It could also put the Obama administration and Democrats in Congress at odds with a few of their largest supporters.

The $30 billion deal between the nation’s largest cable system and a Hollywood juggernaut will create a media behemoth that will undergo strict scrutiny by federal regulators appointed by Obama, who voiced concern about increasing media consolidation on the campaign trail.

But the companies under scrutiny in the biggest media deal since the Time Warner-AOL merger are helmed by executives who have been long-time contributors of the Democratic party and have other ties to the administration.

Comcast chief executive Brian Roberts made more than $76,000 in political contributions to Democrats since 2006, compared to $13,500 in contributions to Republicans. Comcast vice president and top lobbyist David Cohen made about $180,000 to Democrats in the same period, compared to $12,000 to Republicans, according to
Cohen also helped raise more than $6 million for Obama’s election campaign.
There have also been political endorsements. On Thursday, the same day the merger was announced, Roberts expressed his support of Obama’s healthcare package. It was the first time Roberts took a position on the issue. He had been invited to attend the White House job summit that day, but could not make it.
Jeffrey Immelt, chief executive of General Electric, which would own a 49 percent stake of the merged company, also has ties to the administration. He visited the White House six times between Jan. 20 and Aug. 31. Immelt attended last week’s state dinner, and is a member of Obama’s Economic Recovery Advisory Board.
During the 2008 election cycle, Comcast’s political action committee raised more than $2.5 million.
Despite the companies’ political and financial support, the proposed deal faces significant regulatory hurdles, especially from an administration that has openly said it will uphold anti-trust laws, particularly in the media industry.
On the campaign trail, President Barack Obama talked about the need to strengthen diversity in television, cable and radio programming.  
Federal Communications Chairman Julius Genachowski, who was appointed by Obama and is a close personal friend of the president, said in his Senate confirmation hearing that he would pay attention to “excessive” media consolidation. The agency will begin a formal media ownership review next year.
Christine Varney, head of the Justice Department’s antitrust division, has said she believes the department should scrutinize vertical mergers, or deals between distributors and producers. A marriage of Comcast, one of the largest distributors of content, and NBC, a robust producer of it, would fall into that category.
The FCC will have to sign off on the merger. Justice will work with the Federal Trade Commission to determine which agency will review it. The deal could take as long as 18 months to close.
If they combine, the companies will form a media powerhouse whose programming would account for 20 percent of viewing hours in the country. One in every seven stations would be owned by Comcast, the company said.
Democrats in Congress have expressed concern over the deal, saying it will require an in-depth analysis. Key lawmakers who lead the committees with jurisdiction over the deal have called for hearings on the matter.
Sen. Herb Kohl (D-Wis.), chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, said the “acquisition will create waves throughout the media and entertainment marketplace, and we don’t know where the ripples will end.”
Rep. Henry Waxman (D-Calif.), who is from Beverly Hills and chairs the House Energy and Commerce Committee, also said the merger “raises questions regarding diversity, competition and the future of the production and distribution of video content.”
In a meeting with reporters Friday, Comcast’s Cohen said he expected those reactions.
“We strongly believe that this transaction is pro-competition, pro-consumer and in the public interest,” he said. “We welcome public scrutiny and congressional hearings because it allows us to make our case.”
Media consolidation aside, Comcast has opposing positions on two other policies endorsed by Obama.

Comcast has historically not been a big supporter of labor unions. Obama, on the other hand, has strong union relationships and in the Senate co-sponsored the Employee Free Choice Act, pro-union legislation that would do away with secret ballots in union organizing elections.
Another priority of the Obama administration is network neutrality, which would prohibit Internet service providers from giving preferential treatment to any type of traffic or content on the Web. Comcast’s inference with some high-bandwidth traffic escalated the issue, and the FCC said the company was in violation of its open-Internet principles. Comcast challenged the FCC’s decision because the agency's principles are not codified rules. The company opposes net neutrality regulations, saying it needs the ability to manage traffic on its networks.
Comcast is the nation’s largest residential Internet service provider. By merging with NBC, public interest groups warn it could end up producing a wide array of online content, as well as controlling access to it.
“The Obama administration has made a commitment to reinvigorating the nation’s antitrust laws,” said Corie Wright, policy counsel at public interest group Free Press. “They can’t ignore the severe threat this merger poses and must take the necessary measures to prevent harm to competition and consumers.”
Cohen said competitors will have access to its television and online content, and that prices will not rise as a result of the merger.
“Prices are not going to go up for Comcast customers any more or less than they would have without this transaction,” he said.


Comments (3)

Who is silly enough to think what Obama has said in the past will carry any weight when he has the potential of 20% of the viewing hours in the country firmly committed to swabbing his arse for him?BY James on 12/05/2009 at 20:55
the merger will go through and with Obamas blessing. Look at the $2.5 million rsised by Comcasts. Obamas will place his blessing on the merger and that will be all right with the Democrats in Washington. Sen Durban,Rep Costello. Not sure with Sen Burris.BY William K Siglar on 12/05/2009 at 21:05
Comcast is anti-union? The writer thinks that makes any difference? This crowd will use anyone and everyone and push them under the bus for more campaign cash. Plus, those aren't teachers unions or government workers unions or SEIU. They are skilled workers. They Obamanauts aren't keen on skilled workers, they stray too often into the GOP voting column.BY Bill on 12/06/2009 at 09:07

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