So what happened to the Comcast-TWC deal? Not enough lobbying, or not good enough lobbying?
"They talked a lot about the benefits, and how much they were going to invest in Time Warner Cable and improve the service it provided, but every time you talked about industry consolidation and the incentive they would have to leverage their market power to hurt competition, they gave us unsatisfactory answers."
-- an unnamed senior Senate staff aide, quoted by the NYT's Eric Lipton regarding Comcast's massive lobbying efforts for its takeover of Time Warner Cable
"No amount of public-interest commitments to diversity would remedy the consumer harm a merged Comcast-Time Warner would have caused to millions of Americans across the country."
-- CA Rep. Maxine Waters, who had "offered reserved support for [Comcast's] NBCUniversal deal after playing a leading role in pushing for concessions by Comcast to promote diversity in its programming"
"This merger would have further enhanced this company’s incentive, its means and its history of abuse of market power."
-- CT Sen. Richard Blumenthal, an early critic of the deal
As a Time Warner Cable customer, and thus hardly a disinterested observer, I have so far resisted the impulse to dance a jig over the announcement that Comcast has abandoned its effort to swallow TWC. I can't help thinking that great minds will yet knock heads together and come up with something worse.
Still, it's a relief. My only problem with TWC is that they charge too damn much. Whereas those Comcast people -- they're devils.
So what happened? "Ultimately," says the NYT's Eric Lipton in his post mortem, "Intense Lobbying Failed to Assure Comcast's Deal," the deal to amalgamate the country's top two cable operators "collapsed because of clear signals that federal regulators were preparing to block it."
Eric leads off with this tale:
David L. Cohen, the master salesman who runs the Comcast Corporation’s lobbying efforts, stood before a room full of Latino House lawmakers one morning in early December trying to convince them that they should embrace his $45 billion deal to acquire Time Warner Cable.So we're talking, what, not enough lobbying? Or just not good enough lobbying?
But as Mr. Cohen continued to talk — taking up much of the time set aside for the closed-door session — at least some of the assembled lawmakers began to wonder if his highly polished pitch was falling short.
"He was smothering us with attention but he was not answering our questions," said Representative Tony Cárdenas, Democrat of California, who said that in the early stages of the deal he was open to supporting it if his questions were addressed satisfactorily. "And I could not help but think that this is a $140 billion company with 130 lobbyists — and they are using all of that to the best of their ability to get us to go along."
"The warning signs," says Eric, "were already present from the muted reception [the deal] had received on Capitol Hill."
Despite the distribution of $5.9 million in campaign contributions by the two companies during the 2014 election cycle, and the expenditure of an extraordinary $25 million on lobbying last year, no more than a handful of lawmakers signed letters endorsing the deal. By contrast, more than 100 signed letters of support in 2010 when Comcast was pushing its merger with NBCUniversal.And it's not as if Comcast hasn't been to this rodeo before. Eric notes that the company, "at least until this deal, had a near-legendary reputation in Washington for leveraging its connections."
Congress has no direct power to approve or disapprove any merger, but endorsements, particularly if they come from black and Hispanic leaders, can send a subtle but important message to regulators that the deal is in the public interest and should be cleared. It was not that many lawmakers spoke out against the Comcast-Time Warner Cable deal — it was just that many of them remained silent.
In 2013, President Obama stopped by Mr. Cohen’s Philadelphia home for a fund-raiser, and Mr. Roberts was envied for having played golf with President Obama that same year in Martha’s Vineyard.Oh, its connections.
The company carefully assigned members of its sprawling lobbying team to different lawmakers at both the federal and state levels, based often on their ethnicity or past relationships, company officials acknowledged in an interview shortly after the Time Warner Cable transaction was proposed in February 2014.Senator Blumenthal, Eric has already pointed out, "was critical from the deal from the start." He says now, ""There are limits as to how effective even the best advocate can be with a losing case, as this merger would have further enhanced this company’s incentive, its means and its history of abuse of market power."
Comcast, for example, assigned Juan Otero, a former Department of Homeland Security official who serves on the board of the Congressional Hispanic Caucus Institute and now works as a Comcast lobbyist, to be the point person to work with Mr. Cárdenas.
Meanwhile, Jennifer Stewart, an African-American lobbyist on the Congressional Black Caucus Institute board, was assigned to work with Marc Veasey, Democrat of Texas, who is also black. She personally appealed to Mr. Veasey’s staff, urging that he not sign a letter last August questioning the deal, according to an email obtained by The New York Times, citing the company’s work on behalf of the minority community. (Mr. Veasey still signed a related letter.)
Comcast also asked Jordan Goldstein, a former official at the Federal Communications Commission who is now a Comcast regulatory affairs executive, to work with [Connecticut Sen. Richard] Blumenthal’s office. Mr. Goldstein had previously developed a working relationship with Joel Kelsey, a legislative assistant in charge of reviewing the matter for the senator, who is a member of the Senate Commerce Committee.
At the state level, it also hired at least two former state attorneys general — Patrick C. Lynch of Rhode Island and Walter W. Cohen of Pennsylvania — to reach out to state officials, who in many cases have their own antitrust powers, to try to remove impediments to the deal’s approval.
Lawmakers cited a variety of reasons as to why Comcast’s elaborate pitch failed to gain traction this time: The miserable customer service ratings the company earns, for instance, made politicians leery of helping it out. In addition, there were much more substantial antitrust concerns associated with this deal, and some members of Congress said they thought Comcast had failed to live up to its promises in the NBCUniversal deal, and so could not be trusted this time."The miserable customer service ratings the company earns made politicians leery of helping it out"? And members "thought Comcast had failed to live up to its promises in the NBCUniversal deal and so could not be trusted this time"? Oh my.
Other lawmakers and staff members on Capitol Hill, in interviews Friday, cited Comcast’s swagger in trying to promote this deal. They said they felt that Comcast was so convinced in the early stages that the deal would be approved that it was dismissing concerns about the transaction, or simply taking the conversation in a different direction when asked about them.
Comcast itself isn't talking much.
Comcast did not offer on Friday its own post-mortem on the deal’s collapse. "Today, we move on," the Comcast chairman and chief executive Brian L. Roberts said in his short statement. A Comcast spokeswoman declined to comment further.We learn, though, that "in some cases, lawmakers like Mr. Cárdenas and Mr. Blumenthal had private conversations with Thomas Wheeler, the chairman of the F.C.C., to express their reservations." Oh my. And Senator Blumenthal "also spoke directly with Mr. Cohen," the master lobbyist, "who visited the senator’s office for a chat." The senator, however, "said he came away from the meeting unconvinced."
So did "others on Capitol Hill who had similar conversations," like the two quoted at the top of this post, the "senior Senate staff aide who spoke on the condition of anonymity because he was not authorized to speak publicly," and Rep. Maxine Waters."
Meanwhile Comcast is "mov[ing] forward." Watch out in case it comes too close. Unless you're already one of its customers, in which case God have mercy on your soul. And we TWC customers are left to wonder what's in store for us next.