Comcast defends TWC merger at House hearing

Comcast Thursday defended its proposed $45 billion takeover ofTime Warner Cable at a House of Representatives hearing as critics said the mega-merger would create a behemoth that would stifle competition.Comcast vice president David Cohen told a House panel the goal of the merger is toprovide a "significantly improved customer experience," thanks to the increasedability of the new giant to invest in key technologies to advance service.The cable giant came in for pointed criticism from other hearing witnesses, who said Comcast's record shows a history of bullying smaller players that will only getworse if the merger is approved. "Fundamentally, Comcast's strategy is to get everyone to pay them," said DavidSchaeffer, chief executive of Cogent Communications, a large Internet serviceprovider. "When providers simply have no choice but to pay, these costs willnecessarily be passed on to consumers."The proposed merger cannot be found to comport with the public interest."None of the House members who questioned Cohen said they opposed theComcast-Time Warner Cable deal, which would give the combined company some 30percent of the US pay-TV market.Yet lawmakers expressed concern that the merger would concentrate too muchpower over Internet and cable access in one company. But some said they were loathto wade too far into the fast-changing sector.Comcast faced a similar hearing in the Senate a month ago. The huge merger plan isbeing reviewed by the Department of Justice's antitrust division and by the FederalCommunications Commission.House Representative Spencer Bachus, who chaired Thursday's hearing, highlightedthat the combined company would be the largest pay-television provider in 37 of thetop 40 viewing markets in the US."Size alone does not necessarily do harm to competition," the Alabama Republican said, while adding that "there have been cases in our country’s economic history ofcompanies that achieved dominance and then exercised monopoly powers."Cohen said Comcast has taken steps to abide by a pledge not to take more than a 30percent share of cable subscribers, unveiling a deal last month with CharterCommunications to divest some 3.9 million subscribers.Cohen said the company's increased size would enable it to compete with otherplayers from across the technology sphere, such as telecommunications giant AT&T and streaming providers like Netflix and Google, which is growing its video services.- Potentially slower price increases -While the transaction "has the potential to slow the increase in prices," it would notresult in lower prices for consumers, Cohen acknowledgedHe laid blame for "continually spiraling" consumer cable bills at the foot of contentproviders, especially for costly sports events.The remarks came one day after Comcast's NBCUniversal unit and the InternationalOlympic Committee announced a $7.65 billion deal to extend NBC television rightsto broadcast the Olympics through 2032.Schaeffer of Cogent, which had provided Internet access between Comcast andNetflix, recounted how Comcast manuevered to pressure Netflix to sign acontroversial deal to connect directly with Comcast due to service problems fromincreased customer traffic.Efforts by Cogent to engage Comcast to improve networks were ignored, he said."A merged Comcast and TWC will make current anti-competitive practices demonstrably worse," Schaeffer predicted.But Cohen said Netflix, which has opposed the Comcast-Time Warner Cable merger,told Comcast it wanted to deal with Comcast directly and "cut out the middleman.