Majority Statement

• Chairman John D. (Jay) Rockefeller IV

  U.S. Senate Committee on Commerce, Science, and Transportation
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  Majority Statement

  Chairman John D. (Jay) Rockefeller IV

  WASHINGTON, D.C.—We are here today to discuss consumers, competition, and consolidation in the video and broadband markets.

  These are services that are vital to our democracy. They shape the way we communicate. They shape the way we share news and information. They shape the way we entertain ourselves and the way we spend our free time.

  When consolidation occurs in these markets, we need to pay attention.

  When companies swell to include both content and distribution, we need to pay attention.

  Because it is vitally important that when we have mergers in these markets, consumers cannot be left with lesser programming and higher rates.

  So today we are going to talk about these issues.

  This hearing is an opportunity to have a serious discussion about consumers—how consolidation affects their lives directly and what we can do to make sure they are absolutely protected. 

  We begin our first panel with authorities from the Federal Communications Commission and the Department of Justice.

  We know they take their jobs seriously. So we respect that while the Comcast-NBC merger is pending they are limited to discussing only the process, rather than the substance of this merger.

  But we look to you to frame our discussion, which we will continue with the private sector witnesses on our second panel. 

  Thank you to all of our witnesses for being here today. Now let’s get started.

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Minority Statement

• Senator Kay Bailey Hutchison

  U.S. Senate Commerce, Science, and Transportation Committee
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  Minority Statement

  Senator Kay Bailey Hutchison

  STATEMENT OF HON. KAY BAILEY HUTCHISON,

  RANKING MEMBER

  COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

  FULL COMMITTEE HEARING on CONSUMERS, COMPETITION, and Consolidation in the broadband and video market
  MARCH 11, 2010

  Mr. Chairman, thank you for holding this hearing today.  The pending transaction between Comcast Corporation and NBC Universal is a significant development in the programming and video distribution markets.

  The scale of the transaction, the changing technology landscape, will make it challenging to members of Congress and regulators to fully understand and appreciate all of the implications of this deal.

  We will need to grapple with evolving technology and convergence between traditionally distinct businesses like telecommunications and video program distribution, and appreciate that there are shifting business models and evolving demands by consumers for choices in content and ways to access that content.

  Viewing this deal in context, and working to make sure that it satisfies the public interest, will require us to challenge some of the assumptions and regulatory models of the past and to look forward.

  That type of forward looking analysis is not a common occurrence in Washington, but I believe it is essential as we discuss this deal and the future marketplace.  We want to make sure the deal does not pose dangers to consumers and competitors, but we also want to make sure that policy determinations about this deal do not impact innovation and investment in this rapidly moving area.   

  In my judgment, the Federal Communications Commission’s review of this transaction should be limited to the transfer of the relevant licenses between the parties and whether that is consistent with the public interest.  Merger reviews at the Commission have not always stayed as narrow as they should, however.

  Frequently, parties have used merger review proceedings as a proxy policy-making forum to pursue conditions that reach well beyond the merger itself.  In a number of cases, previous FCC’s have imposed some of those conditions.

  While I hope that the current Commission will thoughtfully conduct its public interest analysis, I also hope that they avoid imposing conditions that will require a significant ongoing involvement of the government in monitoring and policing the market.

  In that context Mr. Chairman, I would like to note that we have seen some recent disputes between programmers, broadcasters, and cable providers about the terms for retransmission of signals on cable systems.  That has led some to suggest that we need more government involvement in these marketplace negotiations such as through FCC managed arbitration.

  Again, I think Congress and the regulators need to tread very carefully and make sure that the policies we discuss take account of the evolving nature of the marketplace, the competition between providers, and the growing number of choices consumers have to access content.  What we do not want to do is intervene in private market negotiations in a way that disrupts what’s going on in the marketplace or leads to advantages for one stakeholder or technology.

  With respect to the Comcast/NBC deal, Mr. Chairman, I do have a number of questions, particularly how a combined entity would deal with independently owned broadcast stations.  In a number of cases, non-NBC owned stations will have to negotiate the terms for retransmission of their broadcast signal with the very same company that provides its programming.

  How Comcast will deal with those stations, from a transparency perspective is important for us to understand how this transaction could impact one segment of the industry.

  Texas has fourteen Telemundo stations, three of which Comcast will own and operate.  We also have 21 NBC stations, one of which (Dallas/Fort Worth) will be owned and operated by Comcast.  Consumers in Texas want to know how programming and availability of all of these stations will be impacted, but they particularly want to know whether Comcast will continue to invest and develop programming for the stations, and that NBC and Telemundo will remain available as free over-the-air stations.

  Transparency will be important in this area, but it will also be critical to assessing how Comcast will deal with competitors who want access to NBC programming, as well as affiliated programming developed by Comcast such as its sports programming.

  I have heard from a number of smaller cable systems representing primarily rural areas of my state.  Although bundling or “tying” arrangements are prohibited, there are concerns that the combined company may wish, through pricing arrangements, to strongly encourage the smaller systems to accept multiple streams of programming.  I am interested to hear Mr. Roberts’ thoughts on how Comcast will address those concerns and the thoughts of our other witnesses.

  I am also interested to hear how Mr. Roberts and our other witnesses view the 16 voluntary commitments Comcast has made to date, and whether those conditions adequately ensure transparency and the availability of content to consumers and competitors.
  
  Mr. Chairman, I want to thank you again for having this hearing.  I look forward to hearing from our witnesses.

Testimony

• The Honorable Julius Genachowski

  Chairman

  Federal Communications Commission
  Download Testimony (19.58 KB)

• The Honorable Christine Varney

  Assistant Attorney General for Antitrust

  U.S. Department of Justice
  Download Testimony (192.26 KB)

Witness Panel 2

• Mr. Brian L. Roberts

  Chairman and CEO

  Comcast Corporation
  Download Testimony (2.00 MB)

• Mr. John Wells

  President

  Writers Guild of America, West
  Download Testimony (184.91 KB)

• Dr. Mark Cooper

  Director of Research

  Consumer Federation of America
  Download Testimony (225.89 KB)

• Ms. Colleen Abdoulah

  President and CEO

  WOW! Internet, Cable, and Phone
  Download Testimony (245.44 KB)

• Mr. Christopher S. Yoo

  Professor of Law and Communication

  University of Pennsylvania, Philadelphia, PA
  Download Testimony (352.18 KB)