Comcast and Time Warner have made huge donations to the politicians who could block their merger
There are plenty of reasons to worry about the proposal to combine Comcast, America's largest cable and broadband company, with Time Warner Cable, the second largest cable firm and third largest broadband provider.
For one, there's ever more consolidated control over content. There's also the possibility of certain types of content being given special (or worse) treatment based on the provider's financial and political relationship with Comcast and Time Warner Cable. And, of course, there's the prospect of even higher prices for cable and Internet connectivity. Indeed a Comcast executive recently admitted, the company will not promise bills "are going to go down or even that they're going to increase less rapidly."
In the capital of a properly functioning democracy, all of these concerns would prompt the federal government to block the deal. But Washington DC is an occupied capital - occupied by Comcast's vast army. As Time magazine recently reported, "the company has registered at least 76 lobbyists across 24 firms." That doesn't even include telecom lobbyist turned FCC Chairman Tom Wheeler, nor does it include the brother of Senator Chuck Schumer, who just so happens to be a key lawyer for Time Warner. And it doesn't include Senate Majority Leader Harry Reid's chief of staff, who was a Comcast vice president and who has raked in roughly $1.2 million in Comcast payments since taking his government job.
All of that political power, of course, is on top of the combined
$10.5 $9.3 million Comcast, Time Warner and their affiliates have together spent on campaign contributions to federal officials in just the last two years, according to the Center for Responsive Politics.
So, sure, it's possible that Washington will block the merger, but it seems unlikely in a capital that most often follows the orders of its moneyed overlords.
As it turns out, the best hope for blocking the Comcast/Time Warner merger comes not from the federal government in Washington but from the states.
An official with the watchdog group Free Press tells Pando that states -- and even individual cities -- could use their franchising approval processes to force concessions, or consumer guarantees, from the two companies. In Time Warner regions, state governments could also use their power to deny a required re-certification, throwing a wrench into the merger. State attorneys general could also take legal action to halt the deal.
Already, there's rumblings about all these possible moves. According to Consumers Union, "Over two dozen State Attorneys General have already announced that they will be reviewing the transaction" - and they could sue to stop it. Likewise, the public service commission in New York - a Time Warner state - says it is reviewing the deal after the legislature recently empowered it to take action against a merger if cable companies cannot demonstrate it is good for the public. And as of last week, the Greenlining Institute is petitioning the public utilities commission in California (also a Time Warner locale) to halt the deal.
The trouble, though, is that money is a factor in these political arenas, too. For instance, according to data compiled by PoliticalMoneyLine.com, Comcast and Time Warner have given the Democratic and Republican groups that work to elect attorneys general more than $1.4 million in the last few years. Overall, according to the Institute for Money in State Politics, Comcast and Time Warner have spent roughly $17 million on state campaign contributions in the last decade.
In California, where the PUC is being pushed to act, campaign finance disclosures show Comcast and Time Warner have together made almost $800,000 worth of campaign donations in 2013 alone. That includes almost $60,000 to the reelection campaign of Gov. Jerry Brown, who appoints members of the PUC. State records also show the two firms employ a team of lobbyists in Sacramento.
Meanwhile in New York, while one public service commissioner does have ties to a Comcast/Time Warner Cable rival, and while officials from the potential Comcast/Time Warner Cable competitor Cablevision have made substantial campaign donations, Time Warner remains the state's 8th largest political donor, according to the New York Public Interest Research Group. That includes a $175,000 donation for a recent series of ads boosting New York Gov. Andrew Cuomo (D), who, like Brown, also appoints the members of his state's public service commission.
The money Comcast and Time Warner have spent on state politics does not, unto itself, mean the states will refuse act. With surveys showing consumers furious with Comcast and Time Warner customer service, it is entirely plausible that a maverick attorney general or public service commission will try to make an example out of stopping the merger. That's especially possible considering that the firms have comparatively less control over each individual state than they do Washington, D.C.
But watch the upcoming state campaign finance reports - as the merger moves forward in D.C., you are likely to see a lot more Comcast and Time Warner money flooding into state politics than ever before. If the merger goes through without a peep from power players outside the beltway, it will be a good test case of just how much cash it takes to keep the states quiet.