The advertising practices of cable television giant Comcast are raising further questions about the company’s proposed merger with Time Warner Cable (TWC), a transaction that would grant it broad control over local and political advertising, critics say.
Comcast is currently seeking approval from regulators at the Federal Communications Commission (FCC) and Justice Department for its proposed $45 billion purchase of TWC, which would unite the nation’s two largest cable and Internet service providers. Some executives in the cable advertising industry say the merger would grant Comcast sweeping control of the $5.4 billion market for local commercials, potentially allowing it to favor certain political candidates or businesses.
Comcast most recently received scrutiny for its ad policy toward stores that sell firearms and ammunition.
Two stores in Georgia said last year that Comcast would not air their ads unless they removed all references to and images of guns. Comcast said it implemented the guidelines after the Newtown school shooting and added that other media organizations have similar policies.
The policy has raised concerns among gun store owners in suburban and rural areas such as Lafayette, Ind., where Comcast is the only cable provider.
"There are so many things that can harm people if they let it," said Greg Hasek, a gun store manager in Lafayette, in an interview with USA Today last year. "Buffets are so unhealthy they can lead to death by obesity complications. Are we going to stop advertising buffets?"
A Comcast spokesperson told the Washington Free Beacon that the company "accept[s] advertising from commercial businesses that comply with our guidelines and those of our programming affiliates."
"Any claim to the contrary is false and simply not grounded in the facts."
Critics also question whether Comcast’s extensive ties to the Democratic Party will affect the merger approval process and the company’s future business practices. Comcast’s employees, their family members, and the company’s political action committee have donated more than $33 million to political campaigns since 1989, with about $18 million going to Democrats.
Chairman and CEO Brian Roberts, a prominent Democratic donor, has golfed with President Barack Obama and invited the president to his waterfront home on Martha’s Vineyard. Executive Vice President David Cohen has raised more than $2 million for Obama since 2007.
Comcast, along with Dish Network, launched an "all-Obama, On Demand channel" ahead of the president’s inauguration in January 2009 that showed some of his speeches, according to a report by Politico.
The Comcast spokesperson said the company "complies with FCC requirements related to political advertising and we accept qualifying ads from candidates from all parties."
A spokesperson for the FCC said the agency could not comment on merger cases it is currently evaluating. FCC rules require that "any system practices offered to commercial advertisers that enhance the value of advertising spots must be disclosed and made available to candidates upon equal terms."
Comcast’s potential control of the $5.4 billion local advertising market has received scant attention since the proposed merger was announced.
Comcast and other cable operators own two minutes of local advertising on all of their contracted networks. These ads are only seen at the local level. Comcast can advertise their own services during these two-minute chunks or sell the airtime to national, regional, or local businesses.
Following the merger, Comcast would own significant percentages of the markets used by advertisers at each level to purchase this airtime.
Local businesses and political campaigns find the local airtime valuable because they can "geo-target" specific counties and congressional districts. Some fear that they would be priced out of local markets or forced to purchase larger geographic areas if the merger is approved.
Lawmakers have also raised concerns that the merger could lower competition and raise prices for consumers.
A combined Comcast-TWC would be the dominant pay TV provider in 23 of the top 25 television markets and hold nearly 40 percent of broadband subscribers.