A Guide To The Mechanics of the Comcast/TWC Deal. Part IV: Congress, The White House And The Public.

If you read most of the reporting on the Comcast/TWC deal, you would think that Congress and the White House play a huge role. In reality, as I alluded to in the Part I intro, not so much. The political stuff tends to get over-reported in part because it’s easier (it took me about 3000 words just to explain how the antitrust and the FCC review work never mind any actual reporting), and in part because everyone assumes that Washington is a corrupt cesspit where politics invariably determine outcomes.

 

As always, while the political matters, it plays a much more complicated role in the mix. Below, I will unpack how the political pieces (including public input) play into the actual legal and merits analysis. Again, keep in mind that I’m not talking about merits here. I’m just trying to explain how the process works so people can keep track over the course of the merger review (which will last a minimum of 6 months and may well run for more than a year).

 

Political details below . . . .

The Role Of Congress and Political Pressure Generally

 

From all the discussion of Comcast’s lobbying power, Congress and the White House play little formal role. Nevertheless, both lobbying by Comcast and participation by the public have an important role in shaping the outcome.

 

Technically, the antitrust agency and the FCC make their decision in the merits following their respective processes and subject to their respective statutes and legal standards. But ignoring politics in D.C. is like ignoring the weather in sports. It’s a factor that tends to influence things outside the formal structure of the rules of the game.

 

Congressional reaction will tend to influence how the agencies react. If the deal gets support of powerful members on the right committees, or gets broad bipartisan support, then that can intimidate the agencies from pursuing a vigorous case. By contrast, if the deal gets strong opposition, or lacks support from members one would normally expect to see supporting such a deal, then the agencies will feel more confident about taking an aggressive stance with regard to conditions or blocking the deal.

 

As detailed in numerous articles, Comcast has a very effective lobbying organization in D.C. But members of Congress will also look very carefully to see what voters are saying – particularly in an election year. Strong public opposition can keep members from coming out in favor of the deal, or can encourage members to oppose. Members of Congress may also push for certain conditions, or amplify the concerns of particular parties. Officially, the agencies do not give these any particular weight. But they serve to as part of the overall public debate and consensus process that in turn influences the agency analysis.

 

 

Key Committees In The House and Senate.

 

Congress works through its Committees and Subcommittees. Everyone will look to the members of the Committees with subject matter oversight and oversight over the relevant agencies as exerting the greatest influence. In the Senate, these are: the Commerce Science and Transportation Committee (relevant Subcommittee: Communications, Technology and the Internet) and the Antitrust Subcommittee of the Judiciary Committee. As one might expect, the Commerce Committee has general subject matter over Communications and the FCC. Whereas for the Judiciary Committee it is really about the Antitrust Subcommittee, with its overall jurisdiction on the antitrust issues and competition generally, so the Committee as a whole will remain less involved.

 

The Senate Antitrust Subcommittee has scheduled a hearing for March 26. Of relevance, Antitrust Subcommittee member Chuck Schumer (D-NY), who as a home state Senator of one of the Applicants (Time Warner Cable) would usually be expected to support the deal, has recused himself because his brother played a prominent role in the merger negotiations. Senator Al Franken (D-MN), who strongly opposed Comcast/NBCU, has already made it clear that he has significant concerns about the deal. People will look to see whether an how strongly the Republicans support the deal, and whether Democrats other than Franken raise strong concerns and talk about blocking or whether they talk about approval with conditions.

 

On the House side, the situation is similar. The jurisdictional Committee is the Energy and Commerce Committee and the Communications and Technology Subcommittee. (Unlike the Senate, the House Subcommittee is fairly active.) The House Judiciary Committee through its Subcommittee on Regulatory Reform, Commercial Law and Antitrust will also exercise oversight.

 

 

The White House

 

The White House has even less of a direct role in review than Congress. The White House will hold no hearings or play any formal role. Because the FCC is an “independent agency,” the White House has no direct oversight of its activities (other than to appoint the Chair and nominate members). Congress gets very jealous of the President attempting to exert “undue influence” over the FCC. In an election year where Republicans routinely accuse the President of exercising ‘Imperial Prerogatives’ and failing to respect the limits of Presidential authority, it seems highly unlikely that the White House would do anything that would remotely be construed as influencing the FCC.

 

While the DoJ is part of the Executive Branch, antitrust review is considered an enforcement matter and therefore supposed to be free from political influence. So again, the White House will avoid doing anything that looks like trying to influence the process either for or against the deal.

 

This does not prevent every article talking about Comcast’s political power from referencing Comcast CEO Brian Roberts golfing with the President and Comcast Executive VP of Government Affairs David Cohen’s presence at a recent White House state dinner. Nor am I saying that the knowledge of these close relationships does not, by their very existence, play a role in how some decisionmakers analyze the deal. That’s the great thing about an insular town like Washington D.C. You don’t have to be so gauche as to lean on these relationships for everyone to know you have them and that you could lean on them.

 

But in some ways, Comcast almost has too much of a good thing. The danger for Comcast/TWC is that, as with AT&T/T-Mobile, the lobbying becomes the story and public revulsion against “crony capitalism” sets in. Especially in an election year where the Administration hopes that populist themes such as raising the minimum wage will carry the day against Republican attacks on Obamacare and “big government,” the last thing the Administration wants is to appear beholden to huge campaign donors and giant corporations.

 

 

Where Does The Public Fit In?

 

Public input comes in two ways and plays a significant role. First, the FCC will take comments – both at official deadline times and throughout the merger. Commissioners and members of Congress stress that deciding whether to approve the acquisition, and if so with what conditions, is not about ‘counting noses.’ Nevertheless, decisionmakers will look to the strength and level of opposition (or support) in the FCC’s public record as one more factor when thinking about how to respond to the deal.

 

Public input will also shape how members of Congress respond. Members of Congress will look to see whether they get calls or letters from merger supporters or opponents. In an election year, this matters a great deal. If members of Congress think that the public want Big Government to stay out of the way of Job Creating Business, then they will mute opposition or actively support. By contrast, if calls show significant public outrage against further consolidation and how Big Business and Crony Capitalism are crushing The Little Guy, then members will mute their support or want to be seen opposing (or striking a middle ground by pushing for conditions).

 

Conclusion

 

It’s hard to say at this point how this will turn out on the merits, or how long it will take. For a merger this large, the process is extraordinarily complicated and can easily stretch on for up to a year. Hopefully, some understanding of the process will help folks track these developments and enable people to participate.

Stay tuned . . . .

Part I: Intro and Summary

Part II: Antitrust Review

Part III: FCC Review

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