Comcast Endures Senate Skepticism of Time Warner Merger

Now the tough part begins.

Despite a reputation for spreading its money to politicians all over D.C., Comcast underwent an intense grilling on Wednesday as members of the Senate Judiciary Committee examined the Philly company’s proposed merger with Time Warner Cable.

The Wall Street Journal reports:

Senate Judiciary Committee Chairman Patrick Leahy said during a three-hour hearing Wednesday that the $45 billion merger wouldn’t lead to lower cable bills and would reduce the number of competitors in the cable and broadband space. “How specifically does it help the consumer?” the Vermont Democrat asked.

Comcast Executive Vice President David L. Cohen said there was nothing in the deal “that will cause anyone’s cable bills to go up.”

Consumers, he said, “are in the driver’s seat, both for broadband and in particular for video. There are a vast number of competitive choices.” Mr. Cohen said the merger would provide consumers with faster broadband, greater network reliability and access to a wider range of video choices.

Democrats were the most active questioners at the hearing. But committee members on both sides of the aisle pressed the companies on how their tie-up would affect prices and services. They also questioned whether the combined clout of the two companies would give them too much leverage in negotiations with programmers of video content.

Now comes the tough part, says Bloomberg Businessweek:

 The Department of Justice is assessing whether to object to the deal on antitrust measures. When Comcast and Time Warner Cable insist that they aren’t competing against one another and that their deal won’t reduce the number of choices for, say, broadband-seeking Clevelanders, the true audience is the federal agency deciding whether to sue.

DOJ could decide not to file charges, or it could decide to challenge the deal in court, as it did with AT&T’s proposed acquisition of T-Mobile in 2011. The burden of proof in such a case would be on the government, but it might not get that far. Antitrust regulators might be able to kill a deal just by indicating they want to take the proposed merger to court. This is partly because the agency has pretty good chances of winning and partly because a trial would force the companies to expose all kinds of inconvenient confidential information.

The most likely course might be a middle ground, where the Justice Department wrangles with the companies over what conditions it needs not to challenge the deal outright. Comcast could give up some customers or agree not to take certain actions.

One issue Wednesday: Comcast’s lousy reputation for customer service:

During a Senate hearing on its proposed merger with Time Warner Cable, Comcast Executive Vice President David Cohen admitted that Comcast could do a better job on customer service.

“It bothers us we have so much trouble delivering high quality of service to customers on a regular basis,” Cohen said. “Sometimes, we need a kick in the butt.”

Cohen’s comments came just a day after the Consumerist rated Comcast the worst company in America, beating out agricultural giant Monsanto by three percentage points.