WASHINGTON Executives from Comcast Corp (CMCSA.O) and Time Warner Cable Inc TWC.N are expected to defend their plan to merge as they go before the Senate Judiciary Committee on Wednesday, the first hearing since the $45.2-billion deal was announced in February.
The proposed merger has stirred the ire of public interest groups who worry that a bigger Comcast would have too much clout over fast-growing broadband, free rein to raise cable rates and more power over what Americans watch on television.
David Cohen, executive vice president of Comcast, and Arthur Minson, TWC's finance chief are expected to argue that their cable and broadband services do not compete with each other. Time Warner customers also stand to get faster Internet speeds and better cable service, the companies have said.
Further, they are likely to reiterate that Comcast faces competition in both Internet and video markets from the likes of Google Inc (GOOG.O) and Apple Inc (AAPL.O) - an argument Comcast made in filings with the Federal Communications Commission on Tuesday.
A primary concern for Senator Patrick Leahy, a Vermont Democrat and chair of the committee, is "diverse and independent video programming."
"Cable companies play a dominant role in how many people in this country get information. Consumers deserve to know how a merger between two of the largest companies in this industry will impact them," Leahy said in prepared testimony.
Senator Amy Klobuchar, chair of the committee's antitrust panel and a Minnesota Democrat, is worried about both cable and broadband. "I will specifically be looking at how the proposed merger will impact prices and service, how it would affect Comcast's control over programming and what people are able to watch, and how it would change Comcast's control over people's access to the Internet," she said in a statement.
Also due to appear on Wednesday is Gene Kimmelman, head of consumer advocacy group Public Knowledge and a vocal opponent of the merger. Kimmelman was at the Justice Department's Antitrust Division in 2011 when it approved the merger of Comcast and NBC Universal but stopped AT&T's (T.N) proposed purchase of T-Mobile USA (DTEGn.DE).
"The merger will even more firmly entrench Comcast as the gatekeeper at the crossroads of Internet, television, and communications innovation," Kimmelman's testimony says.
In an effort to win approval Comcast has pledged to divest 3 million subscribers so the combined company's customer base of 30 million would be just under 30 percent of the U.S. pay television market. The combined company would also serve between 20 and 40 percent of the high-speed Internet market, Comcast said in Tuesday's filing.
Rounding out Wednesday's panel are James Bosworth from Back9Network, an independent golf channel; Richard Sherwin from Spot On Networks, a managed Wi-Fi provider; and Christopher Yoo, a professor at the University of Pennsylvania Law School.
The Justice Department will review the merger to ensure it complies with antitrust law. The Federal Communications Commission has a broader public interest standard. Attorneys general from Florida, Indiana and several other states are also looking at the deal.
(Reporting by Diane Bartz and Alina Selyukh; Editing by Ros Krasny, Bernard Orr)