Comcast Faces Hurdles on Time Warner Cable Merger, Internet Rules

Company with extensive ties to Democrats is one of Washington’s most powerful lobbying forces

AP

Comcast’s transformation from a midsize firm in the early 2000s to a lobbying powerhouse epitomizes how businesses can profit from influence in Washington, but the cable and Internet giant is now facing some resistance from the Obama administration and regulators, the Wall Street Journal reports.

Comcast CEO Brian Roberts is a golfing buddy of Obama’s, and David Cohen, the company’s executive vice president, was one of the president’s most prolific fundraising bundlers for his 2012 re-election campaign. But Roberts was reportedly caught off guard when Obama began considering "net neutrality" rules that would regulate the Internet like a public utility and potentially threaten the bottom line for Comcast’s online services. Roberts demonstrated his top-level access to the White House by immediately contacting Valerie Jarrett, the president’s senior adviser:

But Ms. Jarrett told him nothing and the last-ditch lobbying fell flat. A few days later, on Nov. 10, Mr. Obama called for the "strongest possible rules" to make sure broadband providers treat all Web traffic equally—a change that would regulate Internet service like a public utility.

The news took Comcast by surprise. The company believes the president’s strong "net-neutrality" proposal, if enacted, could threaten future investment in its fast-growing Internet business and cast doubt on the logic of its proposed $45 billion merger with Time Warner Cable Inc.—a deal currently being chewed over by antitrust regulators.

Comcast boasts one of the biggest corporate lobbying operations in Washington, spending $17 million in 2014, second only to Google Inc. That presence is being tested now like never before. In addition to the threat of new Internet restrictions, Comcast is facing intense scrutiny from regulators on its merger.

Federal regulators have raised concerns that the proposed merger could harm competition in the high-speed Internet market and enable Comcast to browbeat independent programmers and new online video services. However, that has not stopped the company from using its lobbying muscle to try and secure the deal.

Comcast invited a senior antitrust official at the Justice Department to attend a Washington party last year for the Winter Olympics, but she declined due to agency rules. The company announced its proposed purchase of Time Warner Cable less than a month later—which must be approved by the Justice Department and the Federal Communications Commission (FCC). Sen. Cory Booker (D., N.J.) also admitted at a hearing last July that he had "Mr. Cohen’s cellphone number."

Roberts is well-acquainted with FCC Chairman Tom Wheeler:

On Dec. 15, Comcast’s CEO Mr. Roberts met with Tom Wheeler, the FCC chairman. The two are longtime acquaintances, dating back to Mr. Wheeler’s time running the cable industry’s trade association.

Mr. Roberts lobbied for the merger, say people familiar with the meeting, but Mr. Wheeler was noncommittal.