Comcast, NBC Universal CEOs Play Defense on Jobs, Programming

Chairman John Conyers, D-Mich., is approaching the deal “very carefully,” he said in opening remarks. Conyers starts “with the suspicion that vertical mergers can be more dangerous than horizontal mergers,” he said. However, the role of the Internet versus the role of cable is something we've got to begin to look at a far larger basis than the one proposed merger before the committee this morning."

The companies’ stated commitments and existing FCC rules should ensure the deal benefits consumers, said Ranking Member Lamar Smith, R-Texas. Comcast makes a “persuasive” argument that FCC carriage rules prevent it from discriminating against rivals, Smith said. “I continue to worry that media consolidation contributes to the persistent problem of media bias,” he said. But the commitments “lead me to believe this merger could in fact help consumers."

Conyers said he’s never seen a merger after which the new company cut no employees: “There was always job loss.” Rep. Jerrold Nadler, D-N.Y., said labor groups’ complaints about Comcast worry him: “I wouldn’t be at all surprised to hear a labor [representative] say … the employer’s terrible.” But while labor groups are saying Comcast is “terrible,” they also are saying NBC is “great,” he said. “Jobs is the issue for me,” said Rep. Howard Berman, D-Calif.

The Communications Workers of America fears the deal will mean job losses and reduced employee rights, as well as higher cable rates for consumers and reduced competition, said CWA President Larry Cohen. Comcast and NBC Universal debt will increase by $8 billion after the transaction, he said. “To pay for the debt the company has two choices: cut jobs or raise cable prices. Either way, consumers and workers lose."

The companies’ “motivation” for the deal is not to have job reductions, said Comcast CEO Brian Roberts. Rather, Comcast wants to strengthen NBC Universal, he said. Roberts added he’s proud of the company’s labor record and has seen high employee satisfaction. Broadcasters have been under “tremendous duress” in the past couple years, but the pending combination gives NBC CEO Jeff Zucker “great comfort,” Zucker said. “I feel better about the future than I have in a long time."

Several members asked Roberts and Zucker to address complaints by independent programmers that they're disadvantaged when trying to get their programs picked up. Independent Film and Television Alliance (IFTA) President Jean Prewitt called the deal “a further step in the extensive drive toward vertical integration in the media industries that has already severely reduced the chances for independently sourced programming to reach the public.” If approved, the deal would mean “far less choice in programming” for consumers, she said. To be acceptable, there must be “strong, enforceable conditions included to ensure that independent program suppliers will have more access to distribution slots on competitive conditions as a result of this merger."

It’s “not the case” that Comcast has shut the door to independent programmers, said Roberts. To compete, the company relies on having the best programming. Zucker agreed, saying NBC seeks the best content, wherever it may come from. Of 20 new shows currently in production at NBC, one-third come from non-affiliated companies, he said.

"Independent programs may well find their way onto these outlets,” but “they do not find their way because independents are able to go through the door and negotiate to get them in place,” Prewitt said. “They find their way because they have been separately picked up by a studio.” She praised Roberts for saying Comcast is willing to talk to independents about putting programming on its online TV Everywhere service, “but overall, to quote Ronald Reagan, ’trust but verify.'"

Seeking to work out differences among witnesses on jobs and independent programming, Rep. Sheila Jackson-Lee, D-Texas, offered to broker meetings between the companies’ executives and CWA and IFTA. Prewitt said she had sought a meeting with Comcast but never heard back. Roberts said he wasn’t aware of the request, but he and Zucker agreed to Jackson-Lee’s proposal.

Later, Rep. Maxine Waters, D-Calif., sharply criticized the level of diversity on both companies’ boards, as well as NBC’s network programming. Diversity “starts at the top,” but there are few minorities on either company’s board, she said. NBC currently has no shows with an African-American central theme, she said. Adding in the deal’s possible job implications, “I don’t know why I should be supportive” of the combination, she said.

All NBC’s shows have multi-cultural casting, but there isn’t a program specifically for African-Americans because it hasn’t been able to find a strong enough show yet, Zucker said. Rivers dismissed the answer, suggesting that Zucker talk to Prewitt and independent programmers. “It is very difficult to accept that you cannot find the kind of program I'm talking about,” Rivers said. “I don’t think black viewers would like to hear that kind of an answer, and I think you can do better."

The National Urban League has taken no position on the deal, said President Marc Morial. But Comcast has historically shown it’s committed to diversity in employment and programming, and has worked with the League on diversity efforts, he said. If any local broadcast licenses are spun off as a result of the merger, minority business “should have a fair and equal opportunity to acquire these assets,” he said.

Smith asked Comcast if the company would engage more in protecting intellectual property after the deal. Roberts noted the new company will have a “huge motivation” to fight piracy, and will be involved with the MPAA. And he pledged to “personally engage” on the issue. Addressing a similar question by Rep. Bob Goodlatte, R-Va., Roberts said tackling copyright protection issues is “becoming more urgent."

Comcast’s promises are “useless,” said Consumer Federation of America Research Director Mark Cooper in opening testimony. “Any serious discussion of conditions must address all of the major areas of competitive concern, in addition to the localism and diversity areas that Comcast has admitted are a problem.” To ensure they can enforce conditions, the FCC and Justice Department should “complete industry-wide proceedings that address the underlying problems before the merger is approved,” he said.

If Comcast increases retransmission payments to NBC affiliates, as Roberts recently indicated, consumers may see higher rates, said Media Access Project President Andrew Schwartzman. “This may or may not be a good thing for the future of broadcast TV, but no one should doubt that the impact of this would be to raise cable rates for everyone,” he said. “If Comcast pays more for retransmission consent, customary industry contractual arrangements are such that the same higher rates will be applied to affiliates of other networks as well. Mr. Roberts certainly is not going to absorb those costs; they will be passed on to the public in the form of higher rates."

The hearing lasted five hours, with one brief recess for votes. Next up for Comcast and NBC Universal is a hearing before the Senate Commerce Committee. A date hasn’t been announced, but Senate and industry sources said it will likely be in mid-March, and possibly in the second week. The House Commerce and Senate Judiciary Committees, which also have jurisdiction, held hearings earlier this month.