Unraveling Comcast Merger Exposes Weaknesses In Its Powerful Lobbying Arm

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Comcast spent $4.62 million on lobbying in the first quarter of 2015, an increase of 50 percent from its spending in the same quarter last year. But now the cable giant is reportedly walking away with little to show.

Much of Comcast’s spending was aimed at ushering through the company’s merger with Time Warner Cable Inc. and preventing the adoption of strict net neutrality rules. Today Bloomberg reported Comcast is dropping the deal. The news came a day after the FCC staff recommended a hearing on the merger, a procedural move that would essentially halt the deal in its tracks.

Comcast has not responded to TechCrunch’s requests. The FCC and Time Warner Cable Inc. declined to comment on the reports.

In January, The Wall Street Journal reported that the company’s lobbying arm was facing a test. Looking at this merger and the net neutrality rulemaking, it failed.

Senator Al Franken, a strong opponent of the merger, said the company’s lobbyists are a known force on the Hill.

“If anything this might give them a false sense that this deal is going to happen because of their power, their presence on the Hill,” Franken said.

He noted he had trouble convincing his colleagues in Congress to oppose the deal.

“I didn’t understand how on its face it wasn’t anticompetitive,” Franken said. “I was a little amazed at how hard it was to get colleagues to come along with me.”

Earlier this week, Franken did send a letter with five other colleagues opposing the merger.

The merger has been sharply criticized because it could result in Comcast controlling more than 50 percent of the broadband . Opponents argue this would result in less competition, leading to higher prices for Internet and cable and worse service.

This it the second political hit for the telecom giant this year, following the defeat the entire industry took when the Federal Communications Commission released new net neutrality rules. Despite a string of propaganda saying it supports net neutrality, Comcast has been very opposed to the rulemaking. It was one of the first companies to come out and promise a legal battle once the new rules were passed. It also made an empty threat to reconsider its investment plans in broadband.

At the time, Comcast could not take such action if it wanted to because it would violate the terms of its deal with Time Warner. Now, that threat could be taken a bit more seriously, but to remain competitive with other providers it needs to continue to expand its broadband investments.

Earlier this week, Franken predicted that the tide was turning against this deal in an op-ed for TechCrunch.

“Theres been a lot of momentum in the last week,” he said in an interview with TechCrunch today.

 

Franken compared the recent shift to the change in opinion from the FCC that we saw with net neutrality in his op-ed. Although both represent a victory for the consumer over the corporate giant, the merger never achieved the same public rally as net neutrality. Public comments on net neutrality to the FCC reached about 3.7 million. The agency did not have exact numbers available on the comments it received related to the Comcast Time Warner merger, but a search of the FCC’s Electronic Comment Filing System resulted in about 100,000 comments.

Franken said the merger played out differently, after reports surfaced that both the Department of Justice and FCC were opposing the deal.  He said if the report Comcast is pulling out is true, it is likely a result of the meeting it had with the agency yesterday.

“If this is indeed true, they must have gotten message the deal wasn’t going to happen,” he said.

Even though fewer comments were submitted in the Comcast merger deal, there is a strong Internet campaign, Stop Mega Comcast, carrying on this message. It represents a broad swath of affected markets, ranging from broadband to Latinos and minorities who could have their programming limited by such a deal.

“Today’s Bloomberg report that the DOJ is preparing to file suit to block the Mega Comcast merger is encouraging,” the group said But, we also recognize that the DOJ and FCC review is ongoing, so we intend to continue to vigorously advocate for the formal rejection of this merger, amplifying the voices of businesses, consumer organizations and more than 700,000 citizens who have spoken out against this bad deal,” the group said in a statement.

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