Comcast, Time Warner Cable defend merger in House

Comcast and Time Warner Cable executives were literally on the hot seat Thursday in Congress.

When the temperature in the hearing room at the Rayburn House Office Building rose because the heat was on for some reason, antitrust law subcommittee Rep. Spencer Bachus, R-Ala., told the panelists that the heat had been on before he arrived. "I have asked them to turn on the air conditioning, which I understand has now kicked on. If any of the witnesses in (the) audience want to take off (your) coat," he says, "you may save yourself a lot of shine when you give your testimony. "

Comcast executive vice president David Cohen quipped, "We appreciate you bringing alive the analogy of being on the hot seat."

Bachus countered," This is a hotter hot seat than normal and was not intended this way. I think Mr.(Darrell) Issa sometimes does turn up the heat. We don't do that in this committee. It isn't stress. It is hot in here."

Comcast and Time Warner Cable are seeking to merge in a $45 billion deal that the companies announced in February. Last week, Comcast announced that it would divest about 3.9 million customers in a swap with Charter Communications and the creation of a new publicly traded spinoff pay TV provider.

That transaction would put Comcast's managed residential subscriber base below 30% of total cable TV subscribers in the U.S., the commonly accepted level of coverage for approval, Cohen told the committee Thursday.

While much of the focus has been on the post-merger company's pay TV footprint, some legislators wondered whether the broadband reach of the company might be more important. Rep. Blake Farenthold, R-Texas, expressed concern about the merged company instituting data caps for consumers. While telecom companies such as AT&T, Google and Verizon could eventually provide broadband competition, "it's the short-term I'm worried about," he said.

That questioning tapped into an issue looming over the hearing, that of net neutrality. Several in Congress, including Sen. Al Franken, D-Minn., have come out in opposition to Federal Communications Commission chairman Tom Wheeler's proposed net neutrality, or Open Internet, rules that the FCC will consider next week. Wheeler has said that he plans to reinstate net neutrality rules that would prevent Internet service providers from blocking or discriminating against lawful content.

But critics say the proposed rules amount to discrimination because Internet service providers could charge content providers to deliver their content via "fast lanes" to ensure higher quality. "We cannot allow the FCC to implement a pay-to-play system that silences our voices and amplifies that of big corporate interests," Franken says in a video released Wednesday.

Two Democratic FCC commissioners on Wednesday also expressed concern about a less-than-open Internet. The commission should delay consideration of the rules for another month, Commissioner Jessica Rosenworcel said. "I believe that rushing headlong into a rulemaking next week fails to respect the public response to his proposal."

Also on Wednesday, more than 100 companies including Amazon, Netflix, Gawker and Mozilla, signed a letter sent to the agency, urging it to keep Open Internet rules strong to prevent any discrimination of content flowing through the net. "This commission should take the necessary steps to ensure that the Internet remains an open platform for speech and commerce so that America continues to lead the world in technology markets," it said.