Comcast, NBC Execs Grilled by Congress on Proposed Deal

Comcast Chairman/CEO Brian Roberts and NBC Universal President and CEO Jeff Zucker were grilled Thursday by congressional panels in both the House and the Senate on the proposed deal that would give the cable company majority control of the TV network.

Comcast Executive Vice President David L. Cohen wrote in a blog post Friday that "we feel that we took an important step forward" in the effort to get federal regulators to sign off on the deal. Cohen helpfully offered a point-by-point recap of the hearings for anyone who missed it. His bottom line: "We think that Brian [Roberts] and Jeff [Zucker] were able to articulate why this transaction is pro-consumer and strongly in the public interest."

Cohen, by most accounts, didn't get very far in convincing the Democrats on the panels of that "pro-consumer" view. New Sen. Al Franken (D-MN), legendary writer for NBC's Saturday Night Live, seemed to find a panel in which he had more inside information than his colleagues. His questioning of Zucker, his former boss, has been making the rounds on YouTube. A choice bit:

“It matters who runs our media companies,” Mr. Franken said. “The media are our source of entertainment, but they’re also the way we get our information about the world. So when the same company produces the programs and runs the pipes that bring us those programs, we have a reason to be nervous.”

A friend of this publication, Adam Thierer, president of the Progress & Freedom Foundation, was among the witnesses at the hearing. And he eloquently explained why Franken's nervousness is unwarranted. You can go here to read all of Thierer's opening statement, and here to download a video of the hearing itself.

Thierer's first task was to put this merger — and the hysteria surrounding it — into context:

First, let’s remember that we’ve been here before. Paranoid predictions of a media apocalypse have accompanied the announcements of many previous media mergers, from AOL-Time Warner to News Corp.-DirecTV to XM-Sirius. In these cases and almost all others, however, the “sky is falling” claims proved to be greatly overstated.

As for fears of a Comcast-NBC merger leading to a restrictive "content gatekeeper" both on TV and on the Web, Thierer explains that these fears, too, are "overblown." Why? Because market forces encourage — if not demand — open access to content:

More importantly, it’s hard to believe the new firm would restrict its content to just Comcast-owned distribution networks since they would be losing the eyeballs, advertisers, and revenues that would accompany the carriage of their content on other video platforms. Likewise, it would make little sense for the firm to block new or competing channels on their own platform since they would incur the wrath of the programmers and the viewing public alike.

Finally, Thierer tells the congressmen that if they are nervous now about such mergers, they'd better get used to it. This might be the only way to "save" broadcasting in the modern digital economy:

Finally, we need to realize that the ongoing digital revolution is upending many traditional media business models—especially advertising supported over-the-air broadcasting—and that alliances like Comcast-NBCU may be one blueprint for how traditional media operators can evolve and compete going forward.  With both the FCC and FTC currently investigating whether journalism is in trouble and what it might take to “save the news,” many media economists and industry analysts seem to agree that at least some degree of consolidation or collaboration might be necessary.

An interesting debate, which has only just begun.

James G. Lakely (jlakely@heartland.org) is co-director of the Center on the Digital Economy at The Heartland Institute and managing editor of InfoTech & Telecom News.