Corporate Accountability

Comcast Strikes Deal to Acquire Time Warner

Antitrust prosecutors and regulators awoke this morning to salivating news: Comcast, the nation's largest cable provider, struck a deal to acquire Time Warner Cable, the nation's second largest. In its defense to the feds, Comcast will likely borrow from a legal argument first employed by the very business it hopes to purchase. Before Time Warner Cable split from its former parent company, the media giant contended that government attempts to limit its market share violated its First Amendment right to free speech. The argument was both sweeping and effective.

Though Comcast's $40 billion plus bid may have been fueled by a scrappy competitor's recent failed attempt to snap up Time Warner Cable, groundwork for such a behemoth merger to survive the looming onslaught of federal scrutiny was laid long ago. In 1992, in response to growing concerns of uncompetitive behavior by cable companies, Congress passed the Cable Television Consumer Protection Act. The law was designed in part to “ensure that cable television operators do not have undue market power.” It granted broad regulatory powers to the Federal Communications Commission to set and enforce policies over cable companies.

Over the last two decades, however, as cable and media companies consolidated, they have increasingly contested provisions of the law and FCC policies. In 2000, when Time Warner challenged the law's subscriber or market share limit provision by arguing that it violated the company's First Amendment rights, a federal court first upheld the provision. But in what would serve as the beginning of an embarrassing series of defeats to the FCC after it attempted to set a more specific market share limit at 30 percent, Time Warner fought back and won. In court, Comcast has since achieved similar victories against the FCC.

For consumers, whose interests the laws and regulations are designed to protect, Comcast's surge in spending on lobbyists in the direct wake of its last major acquisition may help indicate what to expect over the coming months. In 2009, Comcast struck a deal to acquire a majority stake in NBC Universal. During the next 16 months, as members of Congress, the Justice Department, and the FCC began the process of regulatory approval, Comcast nearly doubled its spending on lobbying, between 2010 and 2011, according to Open Secrets, a project of the Center for Responsive Politics. In 2011, after Comcast agreed to several stipulations by antitrust prosecutors and regulators, among them, increasing and expanding its cable services and programming to minorities, Comcast's acquisition was approved.

Four months later, Comcast recruited and hired Meredith Attwell Baker to fill the position of Senior Vice President of Goverment Affairs; Baker was one of the FCC commissioners who approved the Comcast acquisition.

According to Republic Report, at least two top antitrust enforcement officers currently have ties to Comcast.

About the reporter

Marcos Barbery

Marcos Barbery

Marcos Barbery is a journalist, filmmaker, social entrepreneur, and founder of ReACT.

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