High power executives from Comcast and Time Warner spoke in front of the U.S. Senate on Wednesday, defending their plans to merge the two media companies. This planned merger has received much criticism and, since Time Warner and Comcast are the largest cable providers in the country, many are worried that it would result in one company having too much control over one market.
Democratic Senator Al Franken of Minnesota was the most vocal in his distrust of the merger. He asked about the consumers’ concerns about a rise in prices if Time Warner becomes part of Comcast and the cases of rising prices in the last few years. He also questioned Comcast’s dealings with other competitors and the Federal Commutations Commission in the years since the corporation had gained control over NBCUniversal.
Comcast Executive Vice President David L. Cohen had defended the rising prices as a result of programing costs, citing sports rights as an example. He also expressed that the merger will lead to new benefits for all customers, such as upgrades in the devices provided by the companies, increased broadband speeds, and expanded on-demand programing.
Senator Franken questioned whether Comcast would have any reason to live up to these claims if the company does gain more control over the market. He also questioned them about a FCC fine that was issued to Comcast when they limited advertising for standalone broadband service while promoting their bundling services.
Democratic Senator Patrick Leahy of Virginia, who is the Chairman of the Senate Judiciary Committee, presented reports that, if the merger is approved, Time Warner CEO Rob Marcus will earn $80 million and CFO Arthur Misnton will earn $27 million.
Another big conflict is the influence of who owns the rights to certain sports teams’ game coverage. Senator Richard Blumenthal, D-CT., pointed to Time Warner having the rights to the Los Angeles Lakers and the current ongoing negotiations with rival Direct TV over the rights to the coverage of the Los Angeles Dodgers.
Cohen has stated that the unification of the two companies will not have any effect on the competitive dynamic of this area.
He also stated that Comcast has given more carriage to 120 independent channels. However Senator Amy Klobuchar, D-Min., member of the Anti-Trust Subcommittee, has said that she has heard from other media companies about their concerns over the planned union.
As of right now, The Justice Department and the FCC are only reviewing the companies’ plans and have not yet made a ruling.