Comcast Finds Golf and 128 Lobbyists Can’t Sell U.S. on DealTodd Shields and Chris Strohm
Comcast Corp. spends more than any other company lobbying Washington. Its chief executive has golfed with President Barack Obama. Its executives raise cash for Democrats -- all for when they need something in return.
This time, it didn’t work.
The largest U.S. cable company Friday dropped its merger with Time Warner Cable Inc., the No. 2 cable operator. Two federal agencies had balked at the $45.2 billion tie-up proposed last year in a twist of the narrative that says deep connections guarantee big results in Washington.
“Nobody would have imagined, because everyone assumed it was this well-connected political juggernaut,” said Harold Feld, senior vice president of the policy group Public Knowledge that opposes the deal. Instead, Feld said, “the Obama administration has been tightening up.”
Comcast’s world has changed since the announcement. Activists who claimed a victory in February with federal net neutrality rules opposed by cable companies then turned their attention to blocking the merger. Regulators have sought to protect rival online video services that need fast connections to reach customers and could be harmed by the merger.
The company brought formidable muscle to its arguments. Philadelphia-based Comcast spent $17 million on lobbying and engaged 128 lobbyists in 2014, including seven former members of Congress, according to data gathered by the Center for Responsive Politics.
Comcast’s lobbying prowess was met by upstart providers such as Netflix Inc. and Dish Network Corp., which together spent $2.7 million, according to the Center. That’s less than Comcast’s quarterly expense for lobbying.
Staff at the Federal Communications Commission and Justice Department opposed the merger that opponents say would concentrate too much power in one cable provider. The combined company would have had 57 percent of the broadband market and 29 percent of residential video customers.
FCC Chairman Tom Wheeler in a statement Friday cited the online video market “that offers new business models and greater consumer choice.”
The combination posed “an unacceptable risk to competition and innovation, including to the ability of online video providers to reach and serve consumers,” Wheeler said. Ending the deal “is in the best interests of consumers.”
When it proposed the deal, Comcast promised better video and Internet service especially for Time Warner Cable customers, and it said competition wouldn’t be reduced because the companies service different areas.
Lawmakers know Comcast for its generosity. The company’s political action committee has given about $3.2 million to Democratic candidates since 2010, and about $2.7 million to Republicans, according to Center for Responsive Politics data.
Donations have included $85,000 from Chief Executive Officer Brian Roberts, who golfed with Obama in 2013 in Nantucket, Massachusetts, where he also hosted the president for dinner. White House visitor logs show Roberts had a dozen meetings there since 2010, a time when he served on Obama’s jobs council. They included one-on-one meetings with National Economic Council Director Jeff Zients and Larry Summers, who formerly held that job. Roberts and Executive Vice President David Cohen met with Zients again in September, as regulators were considering the merger.
None of the White House meetings concerned the merger, said Sena Fitzmaurice, a Comcast spokeswoman.
Cohen, who’s in charge of Comcast’s government relations, visited Washington last year to appear at congressional hearings, including one where he was introduced by a U.S. senator as “no stranger to Capitol Hill.”
The company placed advertisements on Washington-area radio and newspapers. Lawyers working for Comcast visited the FCC to discuss the deal at least 86 times, or an average of more than once a week, according to agency records.
The two issues -- unfettered Internet access and media consolidation -- have increasingly become a single concern, said Michael Copps, a former Democratic member of the FCC who has worked with Common Cause policy group to oppose the merger.
“People see, ‘boy there are a lot of innovations and it’s an exciting new world, and we want to keep it open,’ ” Copps said.
The FCC’s Wheeler posed a higher hurdle than Comcast may have expected from his background as former leader of wireless and cable trade groups. Wheeler voted against telephone and cable lobbies to pass net neutrality rules that restrict broadband providers from interfering with subscribers’ traffic.
“Chairman Wheeler deserves credit for allowing FCC staff to review this transaction free from outside interference,” Gene Kimmelman, president of Public Knowledge, said in an e-mailed statement. “The review process has focused on the merits of the arguments and the evidence and not political considerations.”
“They have friends on the Hill and they have friends in significant places in the administration,” said Ed Black, president of the Computer and Communications Industry Association. The trade group with members including Microsoft Corp., Amazon.com Inc. and Google Inc. opposed the merger.
“It’s nice to see that even an effective, very well funded, pervasive lobbying campaign cannot win when it was wrong on the facts and the merits,” Black said.