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CEOs defend Comcast-NBC Universal deal

The companies' leaders take some pointed criticism in hearings on Capitol Hill.

February 04, 2010|By Meg James
  • Brian Roberts, CEO of Comcast, left, and Jeff Zucker, CEO of NBC Universal, talk during a House panel hearing in Washington.
Brian Roberts, CEO of Comcast, left, and Jeff Zucker, CEO of NBC Universal,… (Andrew Harrer / Bloomberg )

Congress on Thursday began evaluating fears that the proposed combination of cable television giant Comcast Corp. and NBC Universal would further concentrate the nation's media outlets into the hands of a few, and create a corporate colossus that critics contend could crush small competitors and Internet entrepreneurs, while also leading to higher cable bills.

The $30-billion transaction, announced in December, would bring NBC Universal, including such popular TV channels as NBC, CNBC, USA, Bravo, the Universal Pictures movie studio and Universal Studios theme parks under the control of the nation's largest cable TV operator.

Comcast Chief Executive Brian Roberts and NBC Universal Chief Executive Jeff Zucker made the rounds on Capitol Hill on Thursday, first appearing before the House subcommittee on Communications, Technology and the Internet before spending the afternoon before the Senate Judiciary Committee's panel on antitrust and competition issues.

The media executives received some pointed criticism from Sen. Al Franken (D.-Minn.), a former cast member on NBC's "Saturday Night Live." Franken accused the networks of squeezing out independent producers, contrary to promises they made in exchange for the government lifting network restrictions on program ownership.

"It's really hard to trust you guys, from my point of view," Franken told the executives.

But Roberts and Zucker, attempting to deflect criticism, said the marriage of Comcast and NBC ultimately will benefit consumers because it would foster innovations in technology and Comcast would provide an increased investment in programming.

Roberts tried to ease concern among NBC affiliates and lawmakers that Comcast would convert the network into a pay channel available only to cable subscribers. Such a move would rob rural and low-income residents of one of their primary channels of free local news, NBC national news and entertainment programming.

The NBC broadcast network, Roberts vowed, would remain a free-over-the air service.

"Our goal, our commitment and our actions are to restore NBC and to invest in NBC," Roberts said.If federal regulators allow the union, Comcast would own 51% of the new venture and NBC's current owner, General Electric Co., would hold 49%. Comcast would have the ability to buy out GE's shares over time.

"This new joint venture, if approved, could trigger dramatic changes in the way consumers access video programming, in the way independent programmers distribute their works and also in the way all video distributors compete for customers," Rep. Henry A. Waxman (D-Beverly Hills) said in the House panel's hearing.

Zucker, who has been chief executive of NBC Universal for three years, said he felt better about the future of broadcast television because Comcast has told NBC that it would invest in the broadcast business. The assurances he's received from what would be NBC's future owner, Zucker testified, "gives me more hope about the future of NBC than I have had in a long time."

Several Republican lawmakers pointed out that the proposed merger would not violate any antitrust laws because Comcast and NBC Universal have few businesses that overlap. "There is little to suggest that a Comcast NBC-U combination would seriously threaten competition in the media and entertainment industries," said Rep. Cliff Stearns, a Republican from Florida. "Ultimately consumers stand to benefit."

Not everyone was convinced. Colleen Abdoulah, chief executive of Wow, a small cable TV operator, said her company has had several run-ins with Comcast, including when it dramatically hiked the rate charged to Wow for carrying Comcast's Chicago-area regional sports networks -- an action that Abdoulah said her company was powerless to contest.

But the sharpest questioning came during the Senate panel's hearing.

Franken discussed how, in the mid-1990s, the TV industry was turned on its head when the federal government lifted decades-old rules that until then, banned the networks from owning much of the programming it airs. Those rules were credited with allowing independent producers to flourish.

Franken recalled how media companies made assurances that independent producers would continue to be welcome on network television. But soon after the rules were relaxed, he said, the networks began demanding a financial stake from producers in the programs they produce.

"I have this history where I've seen NBC and I've seen other networks promise something and then do a 180-degree turn. There is no question about that," Franken said.

meg.james@latimes.com

Times staff writer Joe Flint contributed to this report.

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