Comcast’s David Cohen: Merger With Time Warner Cable ‘Not a Very Scary Story’

Comcast David Cohen
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Comcast exec VP David L. Cohen defended Comcast’s proposed merger with Time Warner Cable, saying that it is “a lot less scary, a lot less large and a lot less complicated than some people would like to make it.”

“When you think about it, in the video space, this is not a horizontal deal,” he said in an interview for C-SPAN’s “The Communicators” series, airing on Saturday. “We don’t compete with Time Warner Cable anywhere. There isn’t a consumer in America who has a choice between buying Comcast products and Time Warner Cable products.”

Cohen noted that the combined companies would still command less than 30% of the market share for cable and less than 40% of the wireline broadband, and “as low as 20%” including wireless Internet.

“National share and broadband, I am not sure what that matters. The issue is local share,” he said. “In no local market will there be any less choice in broadband after the transaction than before the transaction.”

Opponents have raised the question of how big is too big, as the merger would mean the No. 1 cable and broadband provider will be merging with the No. 2 cable provider. Even though they don’t compete in the same market, critics have warned that Comcast would have, among other things, greater power when it comes to negotiating for programming.

“A lot of the opposition from this group of people who oppose everything is based upon ‘Big is bad,’ and whenever you get big it is a bad thing,” Cohen said. “But sometimes big is a bad thing. I acknowledge that. But sometimes big is really important, really necessary and really good. And that would tend to be in high capital expenditure industries, in industries where innovation is fast moving and where you need a lot of investment in R&D and innovation to keep pace. And that is our industry.”

Cohen will represent Comcast when the Senate Judiciary Committee holds a hearing on the merger on April 9.

The committee has oversight over the Department of Justice, which is reviewing the merger. Comcast also must obtain approval from the FCC, which will open a file for public comment. Comcast is expected to file a statement with the agency in the first or second week of April outlining why it is in the public interest.

The merger has drawn some high-profile opponents, including Sen. Al Franken (D-Minn.), the Writers Guild of America and some public interest groups, and the CEOs of DirecTV and Dish Network have been critical of the transaction. The latter two companies have reportedly held talks about their own merger.

But Cohen dismissed the opposition so far as coming “from the same group of people” who have opposed previous media mergers over the past 20 years, with many of their “sky is going to fall” predictions “discredited and disproven in multiple transactions.

“I think they are equally untrue today,” he said. “And I must say, I have been struck by the absence of rational,  knowledgeable voices in this space coming out in opposition or even raising serious questions about the transaction, unlike AT&T and T-Mobile, where you had credible and serious economists, antitrust experts and antitrust lawyers saying from the outset saying ‘What is AT&T thinking here?’ [That was] a No. 1 competitor acquiring No. 4 competitor in a straight horizontal transaction, absolutely reducing or eliminating consumer choice.”

The proposed AT&T-T-Mobile merger was rejected by regulators before in 2011 before regulators scrapped their plans.

Cohen’s connections in Washington have come under scrutiny after the merger was announced. Among other things, he was a bundler for President Obama’s reelection campaign, and recently attended a White House state dinner.

Cohen attributed his relationships to political figures to his interest in government and politics.

“I enjoy my relationships with them,” he said. “But having been involved in the political arena,  I know there are no quid pro quos. There are no guarantees. There are no preset expectations. Any good elected official — and I like to believe the many elected officials who are my friends are all great elected officials — are going to make decisions on the merits based on what they believe is the truth and the facts and the law at the time they look at it.”

Cohen also dismissed Netflix CEO Reed Hastings’ recent call for a more sweeping set of net neutrality principles, ones that would cover so-called “peering” arrangements, as “essentially hogwash.” He said that the peering marketplace was “intensely competitive.”

“It has nothing to do with access to the Internet,” he said. “That has nothing to do with net neutrality.”

After striking a deal with Comcast to carry an improved Netflix signal, Hastings groused in a blog post that Comcast and other large ISPs were “extracting a toll because they can.” He was referring to “escalating fees” that Internet providers are charging for interconnection to certain content providers.

Cohen, however, said that what Netflix wanted to make s deal directly with Comcast rather than go through a third party for such peering arrangements, like Level 3 Communications.

He didn’t comment specifically on reports that Apple is in talks with Comcast for some sort of deal, but said that it was an example of “how intensely competitive and fastly evolving the multichannel video space is.”