Comcast’s massive lobbying blitz falls short

To muscle through a massive, $45 billion merger of the nation’s two largest cable companies, Comcast and Time Warner Cable hired an army of lobbyists and flexed an industry muscle practically unmatched in Washington.
 
In the end, the effort came up short.
 
After weeks of speculation about its future, Comcast on Friday officially abandoned its plans to acquire its chief national rival, admitting that its more than 100 lobbyists were unable to convince federal regulators to approve the deal.
 
“No matter how much money you throw at it, you can’t make up a story that people will believe with no basis, and that’s really what they’re trying to do here,” said Matt Wood, the policy director at Free Press, which had opposed the merger.
 
Comcast is perennially one of the top 10 lobbying forces in Washington and ranks in the top 30 organizations for campaign donations, according to the Center for Responsive politics.
 
The company has more than 120 lobbyists working for it.
 
In 2014 — the year the Time Warner Cable proposal was first announced — it ranked eighth in lobbying and spent a little more than $17 million. In the first quarter of this year, it spent $4.6 million.
 
Comcast has also been one of the biggest financial backers of the Obama administration, and has helped fill many congressional campaign coffers.
 
Last year, the company and its employees donated nearly $5 million to federal candidates, with a heavy focus on the ascendant Republican Party. During the presidential election in 2012, it donated a little over $5.3 million, with about 60 percent going to Democrats.
 
It wasn’t just a financial relationship, either. CEO Brian Roberts personally golfed with the president during a 2013 summer vacation on Martha’s Vineyard in 2013.
 
Opponents of the merger chalked Friday’s decision up to the large public backlash against the deal, which included a concerted push from lawmakers such as Sens. Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.).

“This outcome is the direct result of the efforts of hundreds of thousands of citizens, members of Congress, community leaders nationwide, as well as dozens of businesses and organizations who have advocated tirelessly in defense of a competitive media marketplace,” said the Stop Mega Comcast coalition, which was formed last year to oppose the deal.
 
However, they also had some lobbying firepower of their own.
 
The Stop Mega Comcast effort includes Dish Network — a notable Comcast rival — as well as Glenn Beck’s TheBlaze TV and NTCA-The Rural Broadband Association. It spent at least $30,000 to hire K Street heavyweight the Glover Park Group, and individual companies like Dish and Netflix also had their own lobbyists chat up the potential hazards of the deal.
 
As one argument in favor of the merger, Comcast had launched a large public relations campaign surrounding its Internet Essentials program, which subsidizes Internet service for low-income families. It has touted statistics showing that around 450,000 families have signed up for the program, offering $10 monthly service to families with at least one child enrolled in the federally subsidized lunch program.
 
One of the selling points of the merger was that more people would be eligible if the program was rolled out in the Time Warner Cable market as well.
 
But that, too, failed to pay off, amid repeated accusations that it was merely a PR stunt that did little to actually get more families online.
 
Earlier this week, Comcast issued a lengthy blog post defending the program and its low signup rate of just about 17 percent.
 
During an interview on CNBC on Friday morning, Comcast’s Roberts brought up the program unprompted, saying he is “so proud” of it.
 
“When you get into these situations, a lot of things get in the media that just I can’t comment on and you just have to stick to who you believe you are,” he said. “We have a very special company.”
 
Comcast’s efforts were also partially undone by the repeated stories of awful customer service, negligent responses and poor treatment of customers all around.
 
“When we’re talking about the air war — if you want to call it that — no matter how much money you want to throw at it, you can’t necessarily convince people of something they can’t see with their own eyes,” said Wood. “That’s the case for both the claimed consumer benefits and the claim that Comcast is this little family company from Mississippi.”
 
The decision was also a show of force by federal regulators.
 
For the FCC in particular, which was charged with ensuring that the proposed deal was in the public interest, it also highlights the agency’s elevating aggressiveness in recent years, which has only grown with Chairman Tom Wheeler.
 
In addition to scuttling the Comcast merger, signs of opposition from the FCC also forced T-Mobile and Sprint to abandon their plans to merge last August.
 
And earlier this year, the FCC issued the toughest net neutrality regulations the country had ever seen, stepped in to block states from restricting the growth of government-run broadband networks and raised its internal bar for broadband Internet speeds, all against the heavy opposition from major cable companies.
 
“They’re definitely reinvigorated,” said Joshua Stager, policy counsel at the New America Foundation’s Open Technology Institute.

In particular, regulators noted that Comcast’s ownership of NBC Universal and its suite of programming streams could pose a problem for the country, especially in the still-fresh terrain of online video.
 
“Today, an online video market is emerging that offers new business models and greater consumer choice,” Wheeler, the FCC head, said in a statement after news broke.

“The proposed merger would have posed an unacceptable risk to competition and innovation, including to the ability of online video providers to reach and serve consumers.”