Senators are wary of AT&T-Comcast

Dec 31, 2001  •  Post A Comment

Influential members of the Senate antitrust subcommittee have major reservations about the planned $72 billion megamerger of Comcast Corp. and AT&T Broadband, which would create the largest cable company in the nation.
“We have serious concerns about the impact that such consolidation will have on consumers, especially given the increasing level of concentration in the entire media industry,” Sen. Herb Kohl, D-Wis., and Sen. Mike DeWine, R-Ohio, said in a joint statement about the cable union.
“We continue to believe that more competition, rather than additional consolidation, is needed in this industry,” they said, adding that the merger does have an upside: delivery of video, Internet and phone service to many more consumers.
Sen. Kohl is chairman of the subcommittee, and Sen. DeWine is its ranking minority member. The subcommittee will scrutinize the deal early next year at a hearing on television industry consolidation that also will review the $26 billion combination of EchoStar and DirecTV.
The hearing might provide direction to federal regulators charged with approving or rejected the Comcast-AT&T deal. It also could force lawmakers to take a closer look at the cable ownership cap, which a federal appeals court tossed out earlier this year because it found the Federal Communications Commission had not adequately justified it.
The FCC is seeking to restructure the cap, which had barred ownership of cable systems reaching more than 30 percent of the nation’s multichannel video subscribers.
Andrew Schwartzman, president and CEO of the Media Access Project, a public-interest law firm, said Congress has the authority to craft a new limit that’s stricter than the old one.
The timing of the Comcast-AT&T announcement-days before Christmas and as the congressional session was ending-resulted in relatively little reaction from lawmakers because many were in transit and unreachable.
Senate Commerce Committee Chairman Ernest Hollings, D-S.C., is one of Washington’s most outspoken critics of media consolidation, but he’s been distracted recently by national security issues, the anthrax scare and other matters, and he issued no statement as he headed home to South Carolina.
“Obviously a merger of this magnitude will require some oversight,” said Ken Johnson, spokesman for Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, who also may hold a hearing on the deal. But the congressman doesn’t think big is synonymous with bad.
“It’s not the quantity of the competitors, it’s the quality,” Mr. Johnson said. He said the size of a company is no longer the litmus test for deciding the fate of a media merger.