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Comcast's Cohen: Size Not a Reason for FCC to Deny Comcast-Time Warner Cable Merger

Wednesday, August 20, 2014

By Tripp Baltz

Aug. 19 - Comcast Corp.'s $45 million bid to buy Time Warner Cable Inc. will not result in a "company that is too big," a Comcast executive said as the company continued to confront critiques of the proposed merger.

"Bigness is not a reason to not approve" the consolidation, David L. Cohen, Comcast executive vice president, said Aug. 18 at the Technology Policy Institute's Aspen Forum. "Obviously at some point a company could get too big, but it's a hypothetical question. The transaction we currently have in front of us I believe demonstrably does not create a company that is too big."

The Justice Department and the Federal Communications Commission are currently analyzing the proposed merger of the country's top two cable companies. In an Aug. 13 ex parte filing, Comcast said that certain categories of criticism about the proposed merger "lack merit."

'Sufficient Scale.'

Cohen, keynote speaker at the Aspen forum, said the impetus for the transaction is "to enable us to get to a sufficient scale where we are in a better position to compete with our national and global competitors in this space."

He said that every one of Comcast's significant competitors is larger than the company in revenues, market capitalization, number of customers and "national and global reach."

Comcast needs the additional scale that the merger will bring in order to "continue to invest, continue to innovate, and to compete against the rest of the ecosystem," Cohen said. "That makes this transaction pro-competitive and pro-consumer, and strongly in the public interest," he said.

If Comcast were offering to acquire Dish Network or Netflix Inc., such a proposal would create "horizontal implications that are problematic," Cohen said. A merger with Time-Warner, however, is "totally approvable," he said.

Title II Reclassification Would 'Destabilize Broadband Economy.'

In his remarks at the summit, Cohen also addressed the issue of whether the FCC should reclassify broadband Internet access service as a "telecommunications" service under Title II of the Communications Act.

Broadband is currently categorized as a Title I "information service" subject to less-stringent regulations.

Following the U.S. Court of Appeals for the District of Columbia Circuit's ruling in Verizon v. FCC , which struck down two of the FCC's Open Internet rules, the agency has left open the possibility of reclassifying broadband under Title II to provide itself with more regulatory certainty.

"Title II regulation would destabilize the current broadband economy and seriously stifle investment and innovation," Cohen said. "I doubt that we, AT&T, Verizon, Charter, Cox, CenturyLink, Sprint, T-Mobile and others would have kept innovating and expanding our networks at rates anywhere close to what we have been doing if we faced traditional common carrier rules, price controls, and who knows what else under Title II."

Comcast ardently supports "a free and open Internet," Cohen said. "We support net neutrality, with legally enforceable rules, no blocking, and anti-discrimination rules," he said. "But reclassifying broadband as a communication service would be bad for the industry, bad for the Internet ecosystem, and bad for the country."

Cohen also said he believed there was consensus in Washington that it is time to reform the 1996 Telecommunications Act, the last major update to the Communications Act. However, he said, "I don't see it happening in the next Congress."

The Technology Policy Institute is a Washington, D.C.-based think tank that conducts research and discusses regulatory policy in areas of information technology, communications, and innovation.

To contact the reporter on this story: Tripp Baltz in Aspen, Colo. at abaltz@bna.com

To contact the editor responsible for this story: Paul Barbagallo at pbarbagallo@bna.com

For more on the Technology Policy Institute's Aspen Forum is https://www.techpolicyinstitute.org/aspen2014/

 

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