Comcast to face Senate Judiciary Committee on Time Warner deal

WASHINGTON, April 9 (UPI) -- Representatives of Comcast and Time Warner will face the Senate Judiciary Committee Wednesday, a day after filing a 175-page merger application with the FCC.

The Philadelphia-based Comcast said in its Federal Communications Commission filing that the $40 billion acquisition of Time Warner will only benefit consumers and in no way limit competition. The deal will give the newly merged company a presence in 19 of the top 20 media markets.

David Cohen, Comcast's executive vice president, said that the two companies did not compete in any of the 19 cities and argued that deal will only improve services for customers. Many consumer rights groups and non-profits have opposed the merger saying that it will reduce competition in the cable and broadband industry.

"There's been a lot of discussion about whether big is bad, and sometimes when companies join together, big can be dangerous," Cohen said in a conference call with reporters Tuesday. "With this particular transaction, we think big is very good in many respects."

"This merger is, at its core, about broadband, the most profitable and fastest-growing segment of the cable industry," several public-interest groups said Tuesday in an open letter to the FCC and the Justice Department.

Both companies have justified the deal by saying that they have to compete with large tech companies, especially Google, which was mentioned more than a dozen times in the FCC filing. Google is planning to build its own high-speed fiber network and could be serious competition to merged company's broadband business -- after the merger the new entity will have 40 percent market share in the broadband business.

"Google is coming," Cohen said in the conference call. "They are a company with global scale, and they are much larger than we are. We also need scale to compete with the Googles and other generations of competitors."

Rights groups are worried that the behemoth will abuse its power by slowing down Internet speeds for companies to gain leverage during negotiation. Comcast caused a stir when it announced a deal with Netflix, in which the video streaming company paid the broadband provider for high-speed seamless streaming of content.

The new deal would give the newly-created media giant 30 percent of the nation's cable T.V. market, with much of it concentrated in the big media markets of New York , Los Angeles and Chicago among others. Comcast already owns Universal Studios and other T.V. networks like NBC, MSNBC, CNBC, Golf Channel and USA. Time Warner cable owns local sports and news channels including New York 1 and SportsNet in Los Angeles.

[Comcast Blog] [Letter to Justice Department and FCC] [LA Times]