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S. HRG. 111–976 

THE COMCAST/NBC UNIVERSAL MERGER: WHAT 

DOES THE FUTURE HOLD FOR COMPETITION 

AND CONSUMERS? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ANTITRUST, 

COMPETITION POLICY AND CONSUMER RIGHTS 

OF THE

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

FEBRUARY 4, 2010 

Serial No. J–111–72 

Printed for the use of the Committee on the Judiciary 

( 

(II) 

PATRICK J. LEAHY, Vermont, Chairman 

HERB KOHL, Wisconsin 

DIANNE FEINSTEIN, California 

RUSSELL D. FEINGOLD, Wisconsin 

CHARLES E. SCHUMER, New York 

RICHARD J. DURBIN, Illinois 

BENJAMIN L. CARDIN, Maryland 

SHELDON WHITEHOUSE, Rhode Island 

AMY KLOBUCHAR, Minnesota 

EDWARD E. KAUFMAN, Delaware 

ARLEN SPECTER, Pennsylvania 

AL FRANKEN, Minnesota 

JEFF SESSIONS, Alabama 

ORRIN G. HATCH, Utah 

CHARLES E. GRASSLEY, Iowa 

JON KYL, Arizona 

LINDSEY O. GRAHAM, South Carolina 

JOHN CORNYN, Texas 

TOM COBURN, Oklahoma 

BRUCE A. COHEN, Chief Counsel and Staff Director 

MATTHEW S. MINER, Republican Chief Counsel 

SUBCOMMITTEE ON ANTITRUST, COMPETITION POLICY AND CONSUMER RIGHTS

HERB KOHL, Wisconsin, Chairman 

CHARLES E. SCHUMER, New York 

SHELDON WHITEHOUSE, Rhode Island 

AMY KLOBUCHAR, Minnesota 

EDWARD E. KAUFMAN, Delaware 

ARLEN SPECTER, Pennsylvania 

AL FRANKEN, Minnesota 

ORRIN G. HATCH, Utah 

CHARLES E. GRASSLEY, Iowa 

TOM COBURN, Oklahoma 

CAROLINA HOLLAND, Democratic Chief Counsel/Staff Director 

JACE JOHNSON, Republican Chief Counsel 

(III) 

C O N T E N T S 

STATEMENTS OF COMMITTEE MEMBERS 

Page 

Cornyn, Hon. John, a U.S. Senator from the State of Texas, prepared statement ...................................................................................................................... 147 

Feingold, Hon. Russell, a U.S. Senator from the State of Wisconsin, statement ...................................................................................................................... 161 

Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah, ........................... 3 

Kaufman, Hon. Edward E., a U.S. Senator from the State of Delaware ............ 4 

Klobuchar, Hon. Amy, a U.S. Senator from the State of Minnesota ................... 4 

Kohl, Hon. Herb, a U.S. Senator from the State of Wisconsin ............................ 1 

prepared statement .......................................................................................... 172 

Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, prepared 

statement .............................................................................................................. 174 

Specter, Hon. Arlen, a U.S. Senator from the State of Pennsylvania ................. 5 

WITNESSES 

Abdoulah, Colleen, President and Chief Executive Officer, WOW! Internet, 

Cable & Phone, Denver, Colorado, and Board Member, American Cable 

Association ............................................................................................................ 12 

Cooper, Mark, Director of Research, Consumer Federation of America, Washington, DC ............................................................................................................. 14 

Roberts, Brian L., Chairman and CEO, Comcast Corporation, Philadelphia, 

Pennsylvania, and Jeff Zucker, President and Chief Executive Officer, NBC 

Universal, New York, New York ......................................................................... 8 

Schwartzman, Andrew Jay, President and Chief Executive Officer, Media 

Access Project Washington, DC .......................................................................... 15 

QUESTIONS AND ANSWERS 

Responses of Colleen Abdoulah to questions submitted by Senators Feingold, 

Hatch and Kohl .................................................................................................... 38 

Responses of Brian L. Roberts to questions submitted by Senators Feingold, 

Franken, Hatch, Klobuchar, Kohl, Schumer and Specter ................................ 45 

Responses of Andrew Jay Schwartzman to questions submitted by Senators 

Feingold, Hatch and Kohl .................................................................................... 105 

Responses of Jeff Zucker to questions submitted by Senators Kohl, Hatch, 

Schumer, Franken and Feingold ........................................................................ 112 

Questions submitted to Mark Cooper (Note: Responses to questions were 

not received as of the time of printing, May 18, 2010.) 

SUBMISSIONS FOR THE RECORD 

Abdoulah, Colleen, President and Chief Executive Officer, WOW! Internet, 

Cable & Phone, Denver, Colorado, and Board Member, American Cable 

Association, statement ......................................................................................... 125 

Cohen, Larry, President, Communications Workers of America, Washington, 

DC, statement ...................................................................................................... 134 

Cooper, Mark, Director of Research, Consumer Federation of America, Washington, DC, statement .......................................................................................... 149 

Dish Network, R. Stanton Dodge, Executive Vice President and General 

Counsel, Englewood, Colorado, statement ......................................................... 158 

Epstein, Richard A., Free State Foundation, Potomac, Maryland: 

February 12, 2010 ............................................................................................ 163 

March 15, 2010 ................................................................................................. 166 

Page

IV 

Organization for the Promotion and Advancement of Small telecommunications Companies (OPASTCO), John N. Rose, President, Washington, DC, 

letter ...................................................................................................................... 175 

Roberts, Brian L., Chairman and CEO, Comcast Corporation, Philadelphia, 

Pennsylvania, and Jeff Zucker, President and Chief Executive Officer, NBC 

Universal, New York, New York, statement ...................................................... 176 

Schwartzman, Andrew Jay, President and Chief Executive Officer, Media 

Access Project Washington, DC, statement ....................................................... 189 

(1) 

THE COMCAST/NBC UNIVERSAL MERGER: 

WHAT DOES THE FUTURE HOLD FOR COMPETITION AND CONSUMERS? 

THURSDAY, FEBRUARY 4, 2010 

U.S. SENATE, 

SUBCOMMITTEE ON ANTITRUST, COMPETITION POLICY, 

AND CONSUMER RIGHTS, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:36 p.m., in room 

SD–226, Dirksen Senate Office Building, Hon. Herb Kohl, Chairman of the Subcommittee, presiding. 

Present: Senators Kohl, Feingold, Klobuchar, Kaufman, Specter, 

Franken, and Hatch. 

OPENING STATEMENT OF HON. HERB KOHL, A U.S. SENATOR 

FROM THE STATE OF WISCONSIN 

Chairman KOHL. All right. We will commence the hearing at this 

time. I need to notify all here that at around 3 o’clock we will have 

two votes, and we will try to see to it that the votes do not interfere 

unnecessarily with this hearing, although there may be some modest interruption. 

Today we examine the merger between Comcast and NBC Universal. The combination of NBC’s content holdings with Comcast’s 

distribution power would create a media powerhouse of unmatched 

size and scope which, if approved, will have far-reaching consequences for competition and consumers. 

Comcast is the Nation’s largest and most powerful cable television company—with 24 million pay TV subscribers and the dominant share of customers in the markets it serves. It now seeks to 

acquire NBC Universal, which includes the family of NBC broadcasting and cable networks, 25 local NBC and Telemundo stations 

in some of the Nation’s largest cities, and the Universal Pictures 

Movie Studios. NBC has some of the most popular programs on television—from the Olympics, to NFL football, to NBC news programming, to entertainment programs ranging from ‘‘The Tonight 

Show’’ to ‘‘The Office,’’ to give just a few examples. We are witnessing the creation of a media conglomerate which is likely to 

greatly impact both what consumers pay for cable television and 

the ability of other pay television companies to compete fairly in 

the market. 

The highly concentrated nature of the cable TV industry and the 

limited choices available to consumers have long concerned this 

2 

Subcommittee. Rather than compete with each other, large incumbent cable companies have often divided the country into regional 

clusters in which their market share of pay TV viewers reach as 

much as 70 percent or higher. Consumers suffer from annual cable 

rate increases running for the last decade about triple the rate of 

inflation. While recent years have seen the emergence of satellite 

and phone company competitors, these competitors face considerable obstacles, including difficulties obtaining programming owned 

by the cable giants and steep price increases when they are able 

to obtain that programming. Now, because of NBC’s must-have programming, many fear this merger has the potential to make these 

obstacles even worse. 

There are four principal areas of concern raised by this merger. 

First, will this deal create the possibility that Comcast will deny 

‘‘must-have’’ NBC programming to its rival pay TV services or unreasonably raise the price of this programming? Second, will 

Comcast move NBC programming now enjoyed by millions of 

Americans on free broadcast TV to pay cable TV? Third, will this 

deal make it significantly more difficult for independent programmers to have Comcast carry their new cable networks? 

And, fourth, we must pay particular attention to the effects of 

this merger on a new and promising form of competition, namely, 

video programming on the Internet. The widespread deployment of 

broadband Internet in millions of consumers’ homes has led to a 

growing phenomenon of ‘‘cord cutting’’—consumers dropping their 

pay TV subscriptions and watching full-length television programming via high-speed Internet connections. But we have recently 

heard concerns from programmers that cable TV companies are demanding restrictions on their ability to show their programming on 

the Internet. We must be vigilant to ensure that the market 

strength created by this merger does not give the combined company the ability to stifle this new innovative form of competition 

over the Internet. Moreover, NBC owns a significant share in Hulu, 

one of the largest providers of video content on the Internet, and 

there are real concerns regarding its future and its ability to access 

NBC content after the merger. 

So the role of the antitrust regulators at the Justice Department 

and the FCC will be vital to preserving competition. Should these 

agencies decide to allow this merger, we believe it is essential that 

they insist on strong conditions to protect consumers. Comcast has 

already pledged to adhere to a number of commitments with respect to this merger. We appreciate that effort. However, those 

commitments are only a starting point to determine what conditions will be necessary to protect consumers. And it is essential, in 

our opinion, that you, Mr. Roberts and Mr. Zucker, explain to us 

today and the American people how the creation of this media conglomerate will serve the interests of the American people, not just 

the interests of your companies. I know you feel the same way 

about it, and it is in that spirit that we are conducting this hearing. 

We now turn to the Subcommittee’s Ranking Member, Senator 

Hatch. 

3 

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 

THE STATE OF UTAH 

Senator HATCH. Well, thank you, Mr. Chairman. I welcome all of 

you here today to help us to understand this better. Thank you, 

Mr. Chairman, for holding this hearing and for your continued willingness to conduct these proceedings in a fair and bipartisan manner. I have enjoyed the spirit of cooperation and openness that has 

permeated in all of this Subcommittee’s business, and I look forward to working with you for another year. 

If only more people in Washington would follow our example here 

in the Senate Antitrust Committee, the world would be a much better place, as far as I am concerned. However, I do have Senator 

Schumer now working with us on another matter. That is a very 

good thing. And, Franken, I am looking toward you now. 

[Laughter.] 

Senator HATCH. Now, as we kick off another year of work on 

issues relating to competition and consumer protection, we turn to 

what I believe is an interesting and important issue, namely, the 

proposed merger between Comcast and NBC Universal. Both of 

these companies are iconic in their respective industries, and this 

transaction has inspired no small amount of interest and concern 

in the media and among consumers. And, in many respects, I believe these worries are justified. 

In recent years, even as more competitors have entered the video 

distribution market, and as we have seen improvements in innovation and technology, cable prices have continued to rise at rates 

that are difficult to understand. This market is by all accounts a 

dog-eat-dog world, and over the past few years, we have seen companies, including Comcast, use every advantage at their disposal to 

beat out their competitors. In many respects, this is to be expected. 

After all, competition is the essence of our free market system. But 

in this particular industry, these tactics can have a tendency to 

harm consumers by increasing their prices or affecting their services. 

Over the course of this hearing, I hope to get a little better picture as to how this merger will affect this dynamic. And while this 

proposed union has some horizontal implications, it appears to me 

to be predominantly a vertical merger. 

True enough, both Comcast and NBC Universal are players in 

the video content market, and there are legitimate questions regarding the potential impact of putting their respective content 

under the same banner. However, at this point I think the more 

important questions arise when the vertical aspects of the merger 

are examined. 

The implications of the vertical integration of the country’s leading video distributor and one of its leading content providers happen to be significant and more than worthy of our attention. While 

horizontal mergers tend to receive more criticism and scrutiny, 

vertical mergers also have the potential to result in significant foreclosure of competition and violation of our Nation’s antitrust laws. 

That being the case, I have a number of questions as to whether 

as a result of this merger consumers will benefit because of increased efficiencies or whether Comcast will be able to use NBC 

4 

Universal’s content as a weapon to harm competitors and, as a result, pass along costs to consumers. 

When it comes to reviewing mergers, the Congress plays a secondary role. Both the Justice Department and the FCC are charged 

with preserving competition and protecting consumers, and I am 

confident that this transaction will receive a full and exhaustive review by them. 

Today I expect we will have an open and robust debate over the 

relevant issues which should give us an idea as to what issues the 

reviewing agencies will consider when they go over the data. 

Thank you once again, Mr. Chairman, and I look forward to examining these issues in today’s proceedings. 

Chairman KOHL. Thank you very much, Senator Hatch. 

We will turn to other members of the Committee for their opening statements, and we hope you will be relatively brief. Senator 

Klobuchar. 

STATEMENT OF HON. AMY KLOBUCHAR, A U.S. SENATOR 

FROM THE STATE OF MINNESOTA 

Senator KLOBUCHAR. We will be brief, Senator Kohl, because I 

understand we want to get the witnesses started before the votes. 

Thank you for convening this important hearing. This is the Subcommittee on Antitrust, Competition Policy, and Consumer Rights. 

That is a name that we take seriously. We are interested in figuring out what the impact of this merger will be on the consumer 

and not just on business. 

On the one hand, you do have an industry, as Senator Hatch acknowledged, that is rapidly changing. We know that the television 

and video markets are in a state of flux. But we also know that 

consumers, especially younger consumers, want to be able to watch 

programming at a time and place that is convenient to them. They 

use DVRs and video on demand. They stream content over the 

Internet. They watch television shows on mobile devices. So we understand that traditional cable delivery is not what it used to be. 

But, on the other hand, we also know that we have seen increased 

cable rates from $22.35 per month in 1995 to $49.65 per month in 

2008. So there is a balance of concerns here, and I am looking very 

forward to hearing from the witnesses as we evaluate this merger. 

Chairman KOHL. Thank you very much. 

Senator Kaufman. 

STATEMENT OF HON. EDWARD E. KAUFMAN, A U.S. SENATOR 

FROM THE STATE OF DELAWARE 

Senator KAUFMAN. Thank you, Chairman Kohl. 

When I look at my home State of Delaware, I am deeply concerned about competition in the video content distribution market. 

While there are alternative video players in Delaware, Comcast is 

by far the largest in my State. My major concern is that Delawareans have access to the widest range of programming, whether 

they receive the programming through cable, satellite, or Internet. 

I am skeptical about how merging NBC into Comcast will help and 

am worried that it will ultimately harm independent content producers. 

5 

I am sure that the Department of Justice and the FCC have good 

people who are taking great care to review this merger as we 

speak, and I genuinely and eagerly await their comments and judgment. In the event that they approve the merger, I look forward 

to seeing what conditions they propose to ensure that this merger 

serves the public interest by leading to greater choice and more diverse content, lower prices, and improved customer service. 

In the meantime, I want to thank you, Mr. Chairman, for holding 

this hearing so we can talk to the witnesses and get information. 

Thank you. 

Chairman KOHL. Thank you, Senator Kaufman. 

Senator Specter. 

STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM 

THE STATE OF PENNSYLVANIA 

Senator SPECTER. Thank you, Mr. Chairman. 

I approach the hearing with a little different perspective because 

I know Comcast and I know Brian Roberts and I know his father, 

Ralph Roberts. So I am in a position to attest to a number of critical factors evaluating whether this merger ought to occur. 

One factor that I can attest to is they are really very good corporate citizens. Another I can attest to is that the competency of 

their management is brilliant. Ralph Roberts, the distinguished 

gentleman sitting behind Brian Roberts, founded this company in 

1963 in a small town in Mississippi with 1,200 customers, and they 

have grown in size to have almost 24 million customers and 

100,000 employees operating in 40 States and the District of Columbia because of their competency and the service which they 

have provided. They have a tower which now distinguishes the 

Philadelphia skyline, and they have a great deal to offer and a 

great record. 

Just a little on a personal note. Several years ago, I noted that 

Comcast borrowed $7 billion, and I was a little surprised because 

I knew of Ralph Roberts, I knew of Brian Roberts. Brian plays 

squash with my son. They were Gold Medal winners at the Maccabean squash tournament. And when I next saw Ralph and Brian, 

and I said, ‘‘Hey, I am a little worried about you guys, $7 billion? 

Are you going to be able to pay it back? ’’ And the winds have been 

at their back and they are risk takers. So when Senator Hatch 

talks about competition, that is America, and this company are 

competitors. But they also are servers. They did not get almost 24 

million customers when there is a lot of competition out there without being able to provide good service. 

General Electric is their partner, a 49-percent partner. I always 

wonder why anyone goes into a business at 49-percent, especially 

General Electric. And the answer is that General Electric has a lot 

of confidence in Brian Roberts and Comcast, and they are willing 

to take a lesser position because they want this company to manage a big chunk of their assets. And it speaks very well of Comcast. 

I could speak longer, but I see the red light is on, and I know 

what it is like to chair from that central position, so I will cease 

and desist now. But the questions posed by the members so far are 

very valid questions, and I have had extensive discussions and 

have confidence that they have very comprehensive answers. 

6 

Thank you, Mr. Chairman. 

Chairman KOHL. Thank you very much, Senator Specter. 

Senator Franken. 

Senator FRANKEN. Thank you, Mr. Chairman. 

Like Senator Specter, I come to this hearing with a slightly different perspective. As some of you may know, though I am on the 

Judiciary Committee, I am not a lawyer. But I used to be in show 

business. In fact, I worked for years for NBC, and I really feel I 

owe a lot to NBC. 

But what I know from my previous career has given me reason 

to be concerned—and let me phrase that ‘‘very concerned’’—about 

the potential merger of Comcast and NBC Universal. 

Let me start with something pretty basic. It matters who runs 

our media companies. The media are our source of entertainment. 

They are also the way we get our information about the world. So 

when the same company that produces the programs runs the 

pipes that bring us those programs, we have a reason to be nervous. 

I was at NBC in the 1970s, 1980s, and 1990s—but in the 1990s, 

that is when fin-syn, the financial interest and syndication rules— 

most commonly known as fin-syn—were relaxed and then essentially eliminated. And until then, fin-syn rules had prevented networks from owning more than a very small portion of the programs 

that they aired. This was to prevent an inherent conflict of interest. 

At that time NBC executives, including Rick Cotton over there, 

testified that gutting fin-syn would not lead the network to favor 

its own programming. To the contrary, the NBC President at the 

time declared, ‘‘It is in our self-interest to do everything we can do 

to promote a strong, independent production community.’’ But by 

1992, NBC was the single largest supplier of its own prime-time 

programming. Today, if an independent producer wants to get its 

show on NBC’s schedule, or any network’s schedule, it is routine 

practice—and you guys know it—for the network to demand at 

least part ownership of the show. It will affect your placement on 

the schedule, whether you are on the schedule or not, and where 

in the schedule you are. And that is just a fact. And this was completely contrary to what NBC and the other networks said they 

would do when they were trying to get fin-syn rescinded. 

So while I commend NBCU and Comcast for making voluntary 

commitments as part of this merger, you will have to excuse me if 

I don’t trust these promises. And that is from experience in this 

business. 

Now, to make matters worse, after fin-syn was rescinded, studios 

started buying up networks. It opened the way for the studios to 

buy the networks. Disney bought ABC. Viacom, which owns Paramount, bought CBS. And I am worried that this merger could set 

off another round of media consolidation. The next thing we know, 

AT&T and Verizon may decide that they also have to buy a Hollywood studio and a network in order to compete. And that would 

hurt the ability of Minnesotans and people around the country to 

get access to important information, and it will make their cable 

bills go up. 

7 

I look forward to hearing today’s testimony and the opportunity 

to discuss some of these important issues with you all in more 

depth. 

Thank you. 

Chairman KOHL. Thank you, Senator Franken. 

Senator FEINGOLD. Mr. Chairman, I know we are deep into the 

vote, so let me just say a couple of words. 

The proposal to combine NBC Universal and Comcast clearly has 

both vertical and horizontal competition concerns. In addition to 

the content produced by the NBC broadcast network, both NBC 

Universal and Comcast have a significant number of profitable 

cable networks on both sides of the ledger, including USA, Bravo, 

E!, and the regional sports channels. The dangers of this horizontal 

consolidation are significantly compounded by the vertical combination of content and distribution that the joint written statement of 

Comcast and NBC Universal not only admits but touts. 

So while Mr. Zucker and Mr. Roberts believe that this vertical 

integration is not a problem, I have been concerned with these 

types of vertical alliances of behemoths, both in media and elsewhere, for some time. They often seem to be harmful, unsuccessful, 

or both. For example, the vertical combination of Clear Channel’s 

radio stations, concert venues, and promotion was unfair to musical 

artists, small business competitors, and ultimately to concert goers 

and radio listeners. 

Mr. Chairman, I would ask that the rest of my statement be 

placed in the record. 

[The prepared statement of Senator Feingold appears as a submission for the record.] 

Senator HATCH. Mr. Chairman, could I put a statement for Senator Cornyn in the record? 

Chairman KOHL. Without objection on both counts. 

Senator HATCH. Thank you. 

[The prepared statement of Senator Cornyn appears as a submission for the record.] 

Chairman KOHL. We will have some brief introductions before we 

have to recess, and we hope the recess will not be very long. The 

first introduction will be Brian Roberts, and Senator Specter will 

make that introduction. 

Senator SPECTER. Well, thank you, Mr. Chairman. 

Mr. Roberts is on the Board of Directors of the National Cable 

and Telecommunications Association. In his third term as Chairman of Cable Labs, the research and development consortium for 

the cable industry, he has a long litany of prizes and awards. He 

has really an extraordinary record. 

I think the fastest way, Mr. Chairman, is to ask consent that it 

be included in the record, and I have already given personal comments about Mr. Brian Roberts and his family, which I think will 

suffice. 

Thank you. 

[The information referred to appears as a submission for the 

record.] 

Chairman KOHL. Thank you very much, Senator Specter. 

The next witness after Mr. Roberts will be Jeff Zucker. Mr. 

Zucker has spent his career at NBC Universal and has held his 

8 

current position as President and CEO since 2007. He joined NBC 

straight out of college in 1986 and has held numerous positions in 

the company, including executive producer of the ‘‘Today’’ show as 

well as President of NBC Universal Television Group. 

Following Mr. Zucker will be Colleen Abdoulah. Ms. Abdoulah is 

President and CEO of WOW! Internet, Cable & Phone. Before joining WOW! in 2002, she was Executive Vice President of Wireline 

Services at AT&T Broadband and served in a number of positions 

at TCI Communications, Inc. 

After that, our witness will be Mark Cooper. Dr. Cooper is Director of Research at the Consumer Federation of America. In this 

role, he has provided policy analysis and advocacy on behalf of consumers in policy areas, including telecommunications media and 

digital rights. Dr. Cooper also serves as a fellow at four prestigious 

universities and has published extensively on the energy, telecommunications, and high-tech industries. 

Our final witness today will be Andrew Jay Schwartzman. Mr. 

Schwartzman is the President and CEO of Media Access Project, 

a nonprofit, public interest law firm and advocacy organization. He 

has directed the project for over 30 years and regularly appears before Congress and the FCC on its behalf. Mr. Schwartzman is also 

a faculty member of the Johns Hopkins University School of Arts 

and Sciences. 

After we recess briefly, we will be back, and we will begin our 

testimony. 

[Recess 3 p.m. to 3:25 p.m.] 

Chairman KOHL. We will resume the hearing at this time. Before 

we accept testimony, I would like to swear you all in. Would you 

stand and raise your right hand? Do you swear that the testimony 

that you are about to give before the Committee will be the truth, 

the whole truth, and nothing but the truth, so help you God? 

Mr. ROBERTS. I do. 

Mr. ZUCKER. I do. 

Ms. ABDOULAH. I do. 

Mr. COOPER. I do. 

Mr. SCHWARTZMAN. I do. 

Chairman KOHL. Mr. Roberts, we will begin with you. 

STATEMENT OF BRIAN L. ROBERTS, CHAIRMAN AND CEO, 

COMCAST CORPORATION, PHILADELPHIA, PENNSYLVANIA 

Mr. ROBERTS. Mr. Chairman and members of the Committee, it 

is a privilege to come here today to talk about Comcast’s planned 

joint venture with GE regarding NBC Universal. 

As has been mentioned, my father, Ralph, sitting just behind me, 

started Comcast almost half a century ago. I want to thank you, 

Senator Specter, for those nice remarks. Ralph has built a company 

from a single small cable system in Tupelo, Mississippi, to where 

we are today. And with this combination, we are taking the next 

step in our improbable journey. This is indeed an important moment in Comcast’s history. 

Let me briefly summarize the transaction. Under our agreement 

Comcast will become majority owner of NBC Universal. We will 

create a new venture that combines NBCU’s broadcast TV, cable 

programming, movie studio, and theme park businesses with 

9 

Comcast’s limited video programming channels. Comcast will hold 

51 percent of the venture and will manage it while 49 percent will 

remain with GE. 

This transaction puts two great American communications companies under one roof. It will help to preserve traditional broadcast 

television, a business that faces serious challenges. And it will also 

help to accelerate a truly amazing digital future for consumers. Together, Comcast and NBCU can help to deliver the anytime, anywhere, multi-platform video experience Americans want. 

In combination, we will be a more creative and innovative company that will meet customer demands. And our success will stimulate our competitors to be more innovative, too. So this joint venture should be good for consumers, innovation, and competition. 

To leave no doubt about the benefits of the new NBCU, we have 

made a series of public interest commitments detailing how we will 

bring more local programming, more children’s programming, and 

more diverse programming on more platforms. We have also made 

commitments to reassure our competitors that we will compete fairly in the marketplace. Let me offer two examples. 

First, the program access rules have never applied to retransmission consent negotiations, but we volunteer to have the key 

components of these rules apply to our retransmission negotiations 

for NBC stations. 

Second, we want independent programmers with quality content 

to know we are committed to help them reach an audience, so we 

have committed to add at least two new independently owned cable 

channels to our systems every year beginning in 2011. 

The combination of NBCU and Comcast, with no significant overlap between the assets of the companies, is primarily vertical, 

which generally poses fewer antitrust concerns. That also means no 

massive layoffs, no closure of facilities, nothing to produce hundreds of millions of dollars of ‘‘synergies.’’ That is why some on 

Wall Street have not initially fallen in love with this deal, but the 

same lack of overlap is why Washington can, because we will grow 

these great American businesses over the long term and make 

them more successful, not cut them. 

Congress has recognized the benefits of vertical integration before and adopted rules in 1992 to address potential risks. At that 

time there was almost no competition to cable, and more than half 

of the channels were owned by cable companies. So Congress created program access and program carriage rules to ensure that a 

company which owns both cable content and distribution cannot 

treat competitors unfairly. Those rules have worked in the past and 

will continue to work. 

In the last week, some have suggested that our several-year-old 

legal challenge to certain portions of the program access rules is inconsistent with our commitments in connection with this transaction. But while we have argued and believed that today’s marketplace is sufficiently competitive to do away with program access 

rules, we did not pursue this transaction with the intention of not 

following those rules, and we do not intend to behave any differently. So we are willing to discuss with the FCC making the program access rules binding on us even if they were to be overturned 

by the courts. 

10 

In the past decade, Comcast has come to Washington twice to 

seek merger approvals when we acquired cable systems from AT&T 

and Adelphia. Each time we explained how consumers would benefit, and in each case I believe we have delivered. We spent billions 

of dollars upgrading cable systems to make them state-of-the-art. 

We created video on demand, which our customers have used 14 

billion times. And from a standing start 4 years ago, we now give 

millions of Americans their first real phone choice. Once again we 

have described how consumers will benefit, and I want to assure 

you that we will deliver. 

Mr. Chairman, we are asking for the opportunity to make one of 

the great icons of American broadcasting and communications part 

of the Comcast family. We promise to be reliable stewards for the 

national treasures of NBC and NBC News. It is a breathtaking and 

humbling moment in our history, and we hope to have your support. 

Thank you. 

Chairman KOHL. Thank you very much, Mr. Roberts. 

Mr. Zucker. 

STATEMENT OF JEFF ZUCKER, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, NBC UNIVERSAL, NEW YORK, NEW YORK 

Mr. ZUCKER. Mr. Chairman, members of the Subcommittee, 

thank you for the opportunity to testify today. 

As the President and CEO of NBC Universal, I am proud to lead, 

as Senator Hatch described it, an iconic media company shaped by 

two great American brands: NBC and Universal. I am grateful for 

the opportunity to tell you how the proposed venture between 

Comcast and GE will help NBC Universal thrive and also benefit 

our local communities, our employees, and the American consumers 

who enjoy our content. 

In today’s intensely competitive, unpredictable, and dynamic 

media markets, this deal is critical to realizing these benefits. The 

marketplace that I live in is a media free-for-all, a media donnybrook, whether you look at the overall media marketplace, the 

cable channels, broadcast networks, or the Internet. There will be 

more change in our space in the next 5 years than there has been 

in the last 50. 

This deal will not change the fundamental competitive dynamic 

or the extraordinary rate of technological change, but it will help 

NBC Universal compete in the new media world. 

Why is this transaction good for NBC Universal, for the U.S. 

economy, and for the consumers we serve? My answer can be captured in two words: investment and innovation, both of which I believe are essential if we are to remain a vigorous competitor in the 

21st century media market and a growing source of high-wage jobs 

in an economy starved for employment. 

First, investment. The creative programming that lies at the 

heart of our business is neither easy nor inexpensive to produce. 

The entertainment programming on our broadcast and cable networks will require an investment this year of nearly $4.5 billion. 

Every year we invest another $1 billion in news gathering and 

news production. An investment of half a billion dollars annually 

11 

makes Telemundo the leading U.S. producer of Spanish-language 

programming. 

In a highly competitive, unpredictable, and dynamic media marketplace, Comcast’s desire to expand our business and invest in 

programming will benefit NBC Universal, the American consumer, 

and the U.S. economy. 

Also with regards to investment, Comcast’s written commitment 

to over-the-air broadcasting has been widely underappreciated. In 

addition, Comcast has expressed a willingness to play a constructive role in the business negotiations between broadcast stations 

and MVPDs. Those two positions could play a pivotal role in finding a sustainable new business model for the struggling broadcast 

business. 

Second, innovation. We believe that Comcast’s history of delivery 

innovation and technological vision will help us better serve the 

21st century consumer. We must find a sustainable business model 

to meet consumer demands for access to programming anytime, 

anywhere. We need to be more nimble in taking advantage of new 

digital distribution capabilities: on demand, online, mobile, and beyond. 

This venture with Comcast positions NBCU to be a leading innovator in delivering content to consumers where they want it, when 

they want it, and how they want it. In this extraordinarily competitive industry, sustained investment and innovation will be the keys 

to remaining a vigorous competitor. 

This is not your father’s media market. Less than 40 years ago, 

three companies enjoyed 90 percent of all television viewing. Oh, 

how simple it was. Today the world could not be more different. 

Each of the five largest media companies in America now only account for between 5 and 10 percent of all viewing, and a multitude 

of smaller competitors actually account for half of all television 

viewing. The new NBCU’s cable channel business, where we will 

add Comcast networks, will account for just 7 percent of total viewing and be fourth by revenue among owners of national cable networks. 

Television is also a shrinking proportion of the media market. 

People today choose not only between broadcast and cable television, but also increasingly the Internet, Xbox, iPhone, 

PlayStation, and so many other new platforms and technologies for 

their media choices. Very simply, this transaction will not change 

the tidal wave of competition inundating today’s media market. 

The big winner here is the consumer. More investment leads to 

more and better content. More innovation leads to more access, 

anytime, anywhere. 

Let me close by saying how grateful I am for GE’s excellent stewardship of NBC Universal. GE has invested more than $22 billion 

since 2000 and built NBCU into the diversified and vibrant broadcast, film, cable, programming, and media company that we are 

today. With this deal GE will have billions of dollars to invest in 

new technologies and jobs in its core businesses. 

I could not be more excited about the future of this company. 

This deal will give us the resources and the tools to innovate and 

adapt in an unpredictable media world and meet the needs of 21st 

century consumers. 

12 

Thank you for the opportunity to testify, and I look forward to 

answering any questions that you may have. 

[The prepared statement of Messrs. Roberts and Zucker appears 

as a submission for the record.] 

Chairman KOHL. Thank you, Mr. Zucker. 

Ms. Abdoulah. 

STATEMENT OF COLLEEN ABDOULAH, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, WOW! INTERNET, CABLE & PHONE, 

DENVER, COLORADO, AND BOARD MEMBER, AMERICAN 

CABLE ASSOCIATION 

Ms. ABDOULAH. Hi. I am very proud to be here to represent 

WOW! and the American Cable Association. We are a broadband 

competitor in five markets in the Midwest. A million of the households that we pass directly compete with Comcast in Michigan and 

Illinois. Customers appreciate the competitive provider choice that 

they have, and they do not choose WOW! as the low-cost provider, 

because we are not. We differentiate ourselves based on the service 

experience that we offer, and customers recognize it with ten J.D. 

Power Awards and recently in Consumer Reports voted us No. 1 

Internet, phone, and cable operator. 

I do not tell you this to brag. I tell you to illustrate simply that 

the areas of our operation that we have influence over and some 

control over, we are able to be incredibly customer centric and focused on customer needs. Yet when it comes to being a buyer of 

content, both cable and online, we face a whole different set of challenges. We buy most of our content from a handful of very large 

content providers who have significant market power and leverage. 

The prospect of having Comcast and NBCU as the largest 

vertically integrated content provider as our direct competitor for 

customers concerns me. It concerns me because the combined entity will have powerful abilities and incentives to hurt a competitor 

like ourselves and to increase our costs. 

I have these concerns not because of the ‘‘what if.’’ These are 

based on current behaviors that we experience today. Since the reality is that whether the medium is broadcast, cable, online, or 

portability, video content is key to our business. So content negotiations for us are critical. 

Some of the things that we encounter today: Specifically, price/ 

value. Not all content is created equal. Yet when content providers 

come to us and they have a large amount of market power, they 

present their network offerings in a bundle, in a package, and it 

is sort of an all-or-nothing, take-it-or-leave-it kind of fashion. What 

this means is low-value networks that customers do not want, and 

are not asking for, are associated with high-value networks that we 

have to have in order to compete. And why this is an issue for us 

is that we end up having to use channel space for networks that 

customers do not want and do not want to pay for; channel space 

that we could give to independent networks that customers are 

asking for; and it consumes valuable bandwidth that we would prefer to allocate to advanced services that we know customers want, 

like high definition, video on demand, interactive, and especially 

faster online speeds. 

13 

And then there is carriage availability. Content providers with 

significant market power withhold or delay launch timing by slowrolling the negotiations. Two examples. One, online content, this 

would be with the concept of TV Everywhere. It involves packaging 

some cable networks and offering them to the broadband consumer. 

In the past, we have gone to—several months ago, we went to 

Comcast and tried to receive the rights to offer their networks to 

our broadband customers. We also went to the other TV Everywhere cable networks and asked them for the rights. To date, we 

have been denied those rights. 

We were negotiating recently with a network that Comcast has 

a significant ownership stake in. During that negotiation the network refused to include the advanced services that they were developing. 

The bottom line is this. We are not here to whine or to ask for 

special advantages because we are the smaller operator. We also 

believe in competition. It does breed creativity and innovation and 

a clear focus on the customer. Our J.D. Power and Consumer Reports ratings, I think, validate that. We simply ask for a thorough 

and thoughtful review and consideration of the special conditions 

that may be imposed so that we can continue to preserve and promote the competitive choice that we provide today, and that Congress sought in the 1992 and 1996 acts. 

The terms and conditions that we would like to have considered 

are that all terms and conditions for access to content—cable, online, or otherwise—should be the same terms and conditions that 

are available to Comcast. And then business is business. If we do 

run into loggerheads and we find that discriminating behavior occurs, or market power is exerted inappropriately, we would simply 

like to ask for a remedy structure that is meaningful and accessible 

for companies like WOW!. The current retransmission consent and 

program access complaint procedures do not help us. An outside arbitration process does not help us. And the reason for this is the 

timing of these processes are consuming—very time-consuming, 

they are very costly; they generally do not ensure continued carriage while in dispute; and especially they place the burden of proof 

on the complainant who does not have the access to the data we 

need since there is no price transparency. 

So to protect competition and consumers from this combination, 

regulators must impose different and better remedies, and we look 

forward to participating in that process. Thanks for giving me an 

opportunity. 

[The prepared statement of Ms. Abdoulah appears as a submission for the record.] 

Chairman KOHL. Thank you, Ms. Abdoulah. 

Mr. Cooper. 

STATEMENT OF MARK COOPER, DIRECTOR OF RESEARCH, 

CONSUMER FEDERATION OF AMERICA, WASHINGTON, D.C. 

Mr. COOPER. Thank you, Mr. Chairman and members of the 

Committee, for the opportunity to offer a public interest, antitrust 

analysis of a merger that is unique in the history of the video marketplace and will go a long way toward determining whether or not 

14 

the future of video viewing in America is more competitive and consumer friendly than in the past. 

Comcast straddles the dominant video distribution platform of 

the 20th century as the Nation’s largest cable operator and the 

emerging video distribution platform of the 21st century as the Nation’s largest broadband Internet service provider. In its cable franchise territories, its market share of these two vital distribution 

platforms is in excess of 50 percent. Allowing it to acquire one of 

the Nation’s premier video content producers will radically alter 

the structure of the video marketplace, triggering a bevy of anticompetitive effects that will result in higher prices, fewer choices, 

and increase the likelihood that the ugly business model of the 

cable cartel will be strengthened and extended to the Internet. 

There are huge horizontal problems with this merger. Broadcasters and cable companies have a natural competitive rivalry we 

see every day. They argue about the price, channel location, and 

carriage of content. The rivalry is so intense that each side has attempted to enter the rival’s market in an effort to diminish their 

market power. They have been and are disruptive new entrants. 

This merger would eliminate one of the major sources of that competitive rivalry in the industry. 

These two companies compete for audiences and advertisers in a 

dozen of the Nation’s most important local video markets, reaching 

about a fifth of the Nation’s population. In fact, they compete head 

to head for more eyeballs where NBC owns O&Os than in the O&O 

stations that NBC does not compete with Comcast. These two companies compete in the video programming market where Comcast 

regional sports and news production compete with NBC’s news and 

sports output. In three-quarters of the local markets where 

Comcast and NBC compete directly for eyeballs, Comcast has rolled 

out its regional marquee sports programs. If that ain’t competition, 

nothing is. 

These two companies also compete in cyberspace where NBC has 

funded an alternative distribution platform as well as numerous 

websites for its own media properties, and, of course, Comcast has 

launched its video portal and the plan for TV Everywhere. If that 

is not competition, nothing is. 

By combining its distribution market power with the huge portfolio of content, the merger would dramatically increase Comcast’s 

incentive and ability to raise prices, discriminate in carriage, foreclose and block competitive entry, and force programming bundles 

onto other cable systems, larger bundles at higher prices. The likely response to the huge advantage that Comcast would gain with 

this merger would be to convince the other members of the industry to try and muscle up as well, to create similar vertically integrated entities to try and match the bargaining power of Comcast, 

and that would diminish competition. 

The best indicator of the danger we face is the TV-everywhere 

proposal, which is a blatant market division scheme in which the 

two cable operators who have never overbuilt one another, never 

competed head to head in physical space, would like to extend that 

anticompetitive gentleman’s agreement into cyberspace. And if they 

succeed, they will induce the other members of the industry to go 

along. 

15 

For decades, the Congress has labored to bring consumer price 

competition into the video market by opening the door to technology and new business models. But in every instance, policy mistakes were made that allowed the cable industry to extend and preserve its market power. This is the first big policy moment for the 

Internet as the alternative video platform that can compete with 

cable. If policymakers allow this merger to go forward, the prospects for a consumer-friendly, competition-friendly, multi-channel 

video market will be dealt a severe setback. 

This hearing should be the beginning of a long process and rigorous review that ends, in our opinion, with the rejection of this 

merger as anticompetitive and anti-consumer. 

Thank you. 

[The prepared statement of Mr. Cooper appears as a submission 

for the record.] 

Chairman KOHL. Thank you, Mr. Cooper. 

Mr. Schwartzman. 

STATEMENT OF ANDREW JAY SCHWARTZMAN, PRESIDENT 

AND CHIEF EXECUTIVE OFFICER, MEDIA ACCESS PROJECT, 

WASHINGTON, D.C. 

Mr. SCHWARTZMAN. Thank you, Senator. This is the most important media merger since Lucy met Desi. Comcast seeks to combine 

its huge cable and Internet footprint with NBC content assets. 

Senator Specter, even though I have problems with his labor 

management practices and his corporate governance structure, I 

recognize that Mr. Roberts is motivated by business considerations 

and not some sort of design to undermine American democracy. 

But the consequences of this deal, nonetheless, could have precisely 

that effect. 

Concentration of control in the mass media poses unique questions for policymakers and regulators. As Judge Greene said when 

he considered the AT&T consent decree, the values underlying the 

First Amendment coincide with the policy of the antitrust laws. 

Approval of this merger would increase Comcast’s power to 

squeeze out independent programmers with diverse editorial perspectives. There are scores of cable networks which have been unable to obtain carriage on Comcast and other cable systems. I am 

here—and they are not—because some of these companies have 

told me they are afraid of retaliation. An acquisition of NBC’s stable of cable networks will greatly exacerbate the existing imbalance 

of power. 

If Comcast is permitted to purchase the NBC TV stations and its 

highly viewed cable networks, Comcast will be able to bundle unwanted programming when it seeks carriage deals with other 

MVPDs. The problem is even greater with respect to carriage on 

Comcast’s own cable systems. 

After the acquisition, Comcast would have even more networks 

to favor. This means higher prices for all Americans, not just 

Comcast customers. 

There ought to be a law against such abuse. And, in fact, there 

is. Section 616 of the Communications Act is supposed to prohibit 

cable companies from discriminating in favor of their own programming. While Comcast argues that existing law is sufficient to proVerDate Nov 24 2008 11:07 May 24, 2011 Jkt 066290 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\66290.TXT SJUD1 PsN: CMORC
16 

tect independent programmers and the public, it is important to 

point out that it has argued that enforcement of Section 616 is unconstitutional. 

Now, the rules surely pass constitutional muster. But they have 

not worked. Program carriage litigation is prohibitively expensive, 

and the FCC has adopted almost insuperable legal hurdles for complainants. Complaints and appeals are stalled at the FCC for years 

while programmers remain shut out. 

Combining NBC and Universal content with Comcast’s cable and 

Internet distribution systems will also give the merged company 

vastly increased power over content distribution markets. Depending on the circumstance, Comcast could choose to withhold its programming or force it on competitors at inflated prices. This in turn 

will increase cable bills and deprive customers of access to programming from diverse sources. 

While the FCC has program rules which are supposed to stop 

such practices, Comcast has gone to court to challenge the FCC’s 

basic legal authority to continue enforcing the program access 

rules. 

Now, today for the first time, Mr. Roberts says that it may consider agreeing to be bound by the program access rules voluntarily. 

But there are many reasons why the program access rules in place 

are insufficient. 

First, they expire in 2 years, and there is no assurance they will 

be extended. In any event, as Ms. Abdoulah has said, the program 

access regime does not preclude bundling. Although the law prohibits discrimination against competitors in this instance, it simply 

means that as long as Comcast overcharges itself, it can overcharge 

everyone else. And the cost and delay in enforcing program access 

rules makes it a right without a remedy. 

Retransmission consent rules are even less reliable as a tool for 

video competitors. The statutory mandate is simply ‘‘good faith,’’ 

and it does not prohibit price or packaging discrimination. 

The good news is that Internet technology offers the prospect of 

creating vibrant and high distribution channels for video programming. Members of the public can, or soon will be able to, receive 

high-definition video on the Internet. But Comcast has already 

taken steps to kill off such competition, and acquisition of NBC’s 

content will greatly enhance that campaign. 

The prospect of consumers canceling their cable subscriptions 

and relying on the Internet poses an existential threat to the cable 

industry. Comcast’s answer is XFinity, which allows Comcast customers to view video over the Internet without extra charge. The 

catch, which is a very big catch indeed, is that you must keep your 

cable TV subscription. 

XFinity permits Comcast to cut off the flow of programming to 

potential new competitors while preserving the cable TV revenue 

stream indefinitely. Stripped of slick marketing, XFinity consists of 

agreements among competitors to divide markets, raise prices, exclude new competitors, and tie products. 

Comcast’s ownership in Hulu is especially important here. It can 

cripple Hulu by withdrawing NBC content, or it may choose to 

make the NBC content exclusive to Hulu and withhold it from new 

17 

Internet-delivered video competitors. Either way it is bad for the 

public. 

There is more, but no more time. I urge you to oppose approval 

of this merger. 

[The prepared statement of Mr. Schwartzman follows:] 

Chairman KOHL. Thank you very much, Mr. Schwartzman. We 

will now have rounds of questions of 8 minutes. 

Mr. Roberts, we have heard a lot of concern about what will happen to the price charged to rival cable systems for NBC programming once Comcast and NBC come under common ownership. 

Today, when negotiating contracts for carriage, Comcast and NBC 

are at opposite ends of the bargaining table. NBC is seeking to get 

the highest prices it can for its programming while Comcast is trying to keep its programming costs as low as possible. 

But the deals critics argue that after the merger things will 

change radically. Comcast will now have the incentive to raise the 

cost of NBC programming because this will not cost Comcast anything. It will just be paying money from one pocket to the other. 

But in doing so, Comcast will be able to raise the programming 

costs to all of its cable and satellite rivals, and these programming 

costs obviously will be passed on ultimately to the consumer. 

What is your response, Mr. Roberts? Won’t Comcast have the incentive to raise its rivals’s costs by raising the cost of NBC programming if this merger is completed? 

Mr. ROBERTS. Well, I respectfully disagree with that theory, as 

you might expect, and the logic is simple as follows. The program 

access rules, if we were to set an artificially higher price, are designed for the FCC to look at that behavior. So someone would 

come in and say, ‘‘I have a program access complaint.’’ In doing so, 

the FCC and an independent judge would look at what all the 

other companies are charging for similar type programming. 

To put it in perspective, six out of seven channels that Comcast 

carries after the deal will not be owned by Comcast. We have 

agreements with all those unaffiliated companies. About 88 percent 

of the programming that is in the marketplace is not owned by 

NBCU or Comcast. 

So there are robust distributors—DirecTV, Dish Network, Time 

Warner, Ms. Abdoulah’s company—all negotiating with other programmers. There is a very defined marketplace and a third party 

to adjudicate whether somebody is playing games, as was the suggestion perhaps that you would do, so you would overcharge. That 

would not be available to do, the way I understand how the process 

has worked, and that is not the intention. 

In fact, today, NBC can charge freely anything it wants in the 

marketplace and whatever the market will bear. If and when we 

come together, we would fall under the program access rules, which 

then allow a third party to review whether that is a fair pricing. 

And so I think it actually works the other way here because it is 

going to be harder for NBC to have pricing flexibility, not easier. 

Chairman KOHL. But you have never been a supporter of the program access rules, and you have often made the point that they 

should be allowed to expire and not be enforced. Now you are talking that the program access rules exist, they are good, you support 

18 

them. I suppose you are saying they should not be allowed to expire. That is pretty inconsistent with what you said prior, isn’t it? 

Mr. ROBERTS. Well, if I might, let us look at where the program 

access rules started. It was 1992—nearly 20 years ago—and at that 

time over half the cable channels were owned by cable companies. 

And at that time there was no satellite. It was at that time that 

Congress passed the law that helped create the satellite industry, 

and at the same time it created the program access rules. 

If you fast-forward to today, 15 percent of all the cable channels 

are owned by cable companies, and so the market is very different. 

We don’t just have one company distributing; but every consumer 

has choices of two satellites, a phone company, and possibly a fifth 

provider like Ms. Abdoulah’s company. So it is a very different 

marketplace. 

A couple years ago, we and others said it was time to sunset the 

rules, and that is a review the FCC periodically makes. When we 

said that we would like to join forces with NBC Universal, we have 

always planned that we would continue the behavior that we have 

the last 20 years. We have successfully gone into the cable programming business with channels like The Golf Channel and E! 

Entertainment, and we do not find those rules burdensome because 

our behavior has never been inconsistent with them. So we are not 

troubled by seeing them extended given this potential merger. 

Chairman KOHL. I appreciate that. 

Ms. Abdoulah, what would you say? Would you expect that your 

programming from NBC is going to increase if this merger is completed? 

Ms. ABDOULAH. Well, I have two concerns. One is carriage demands. Currently we carry 20 of the combined companies’ product, 

and there are 24 when they combine. There is no reason to believe 

that when we are negotiating renewals that they do not ask us to 

carry the four that we do not carry. Of the 20 we do carry, we do 

not carry them across all our systems, so there is often in negotiations the request—again, in brackets, in quotes—to say we would 

like you to carry our services everywhere. So I think there will be 

an increased demand of carriage of products we do not want. 

For example, the 20 that we do carry today, four of them we 

would never have put on if we could have negotiated so. Eight of 

them we would put in our lower tier. Eight would probably stay 

where they are. 

But that just goes to show that we do not have much leverage 

in saying where we want to carry the networks today, which ones 

we want to carry. So those things would be a concern. 

You asked specifically about price. I find it interesting when I 

hear terms like ‘‘what the market will bear’’ and that it is not— 

because it is not market-based pricing. We have no pricing transparency. The pricing is not based on ratings or consumer 

viewership. It is based on whatever the programmer tells us is the 

price. And many times during negotiations with both these companies and others, rate increases can be as high as 20 percent to as 

high as 156 percent. 

That is the kind of increases that we are facing with very little 

leverage in negotiating. 

19 

Chairman KOHL. What about Mr. Roberts’ argument that the 

FCC rules will prevent unreasonable price increases? 

Ms. ABDOULAH. Yes, thank you for that, sir. I forgot. The problem I have with that, as I understand the process, is what I said 

in my testimony. The burden of proof, if we file a complaint, the 

burden of proof is on us to show that it is an egregious price increase. Well, I have no transparency to price because of confidentiality clauses in our agreements. There are no MFNs. There is no 

way for me to have that kind of burden to prove. I cannot. I do not 

have the data. The burden of proof should be on the programmer 

who is asking for these egregious increases. 

Chairman KOHL. Dr. Cooper, do you have a comment on that? 

Mr. COOPER. Well, the buzz words, the key words are ’’incentive’’ 

and ‘‘ability’’ here. Today Comcast has zero interest in increasing 

retrans fees or bigger bundles. Tomorrow they will own one of the 

major networks, one of the four major networks. They will have an 

interest in higher retrans fees and bigger bundles. 

Today NBC has to negotiate with 100 percent of the cable operators in the country to get carriage. Tomorrow they will only have 

to negotiate with 75 percent. They have a guaranteed access to a 

quarter of the industry. They have a stronger bargaining position. 

You change the incentive, you change the ability, and you end up 

with more stations being pushed on more systems at higher prices. 

Chairman KOHL. Thank you very much. 

Senator Specter. 

Senator SPECTER. Thank you, Mr. Chairman. 

Mr. Roberts, the testimony by Mr. Schwartzman is that you can 

squeeze out your competitors, and he amplifies that by saying you 

can set a high cost for the programming, and as the comment has 

been made, one pocket to another, so far as Comcast is concerned. 

How do you deal with that specific in terms of Mr. 

Schwartzman’s broad charge of squeezing out your competitors? 

Mr. ROBERTS. I want to use this opportunity to say that I think 

this is misunderstood, our motivation for why we would want to do 

this transaction. The video marketplace, going back to 1992, using 

that as one date, has changed radically over the last 20 years. We 

have much more competition. Just in the last 2 years, Comcast lost 

about a million and a half of our customers, and we have gone into 

the phone business, we have gone into the broadband business, we 

have diversified. 

At the same time we have had an explosion of choices so we 

must keep this in mind as we talk about independent programmers 

and people who have the diversity of voice. Going back to 1963, 

there were three TV channels when Ralph started the company, 

and today there are hundreds of channels and tens of thousands 

of shows on demand. So I guess I start with a different point of 

view as to what the last 20, 30, or 40 years have all been about. 

So our motivation is not to try to change the explosion that is 

happening, as Jeff described in his testimony, technologically. That 

is not possible. That is not our motivation. We think content is a 

great business. If we can keep it lawful and legal and protected 

through these new technologies, we think we can give customers 

access anytime, anywhere. We are saying today you can only watch 

HBO on your TV, ‘‘True Blood.’’ Now, if you are subscribing to 

20 

HBO, you can watch it on your PC from anywhere. I think that is 

a great consumer benefit, and HBO knows that their content is secure and is not going to be pirated. 

So I do not believe, Senator, that our plan is, as I said to the 

Chairman, to be motivated to change the behavior that is happening in the market as one company with 12 percent of the programming and 24 percent of the distribution. It is to participate in 

the convergence, the technological explosion, and, frankly, the business diversification. 

Senator SPECTER. Mr. Schwartzman’s prepared testimony, Mr. 

Roberts, points out that you are making a contention that Section 

616 is unconstitutional. It involves some complex litigation which 

is now in the Court of Appeals for the District of Columbia, and 

this question might better be directed to your counsel. But is it the 

contention that Section 616 is unconstitutional or that the market 

is sufficiently competitive that you feel that limitation is no longer 

in the public interest? 

Mr. ROBERTS. Well, as I testified, Senator, there is a set of specific things that have been challenged in terms of whether the market is changed, whether the FCC adequately has reviewed changes 

and whether the courts agree or disagree with that judgment. But 

as we have lived with those rules for nearly 20 years and we have 

built a successful, but small, set of program channels, we are comfortable, working it out with the FCC and voluntarily continuing 

those rules whether the court throws them out or not. 

Senator SPECTER. So you are saying that you would be willing to 

be bound by Section 616 and make that commitment as a condition 

of the—— 

Mr. ROBERTS. The only hesitation is I am not familiar with the 

section number, Senator, so if I may call it ’’program access’’—— 

Senator SPECTER. That is the program access—— 

Mr. ROBERTS. I just want to be sure that I am familiar with the 

right section. But, yes, you know, we are comfortable making the 

program access rules binding on us, even if they were to be overturned by the courts as part of the—— 

Senator SPECTER. So the assertion by some that you are saying 

you may do it is not accurate. You are saying you will do it, and 

you will be agreeable to making that commitment to the FCC. 

Mr. ROBERTS. Yes. 

Senator SPECTER. Mr. Schwartzman, does that assuage your 

fears a little? 

Mr. SCHWARTZMAN. No, it does not. But, first of all—— 

Senator SPECTER. Why not? 

Mr. SCHWARTZMAN. Well, first let me say that Mr. Roberts’ question was well placed because you have confused two different provisions of the Communications Act. The case that is in court involves 

the program access provisions, which is Section 628. The challenge 

to Section 616, which is the program carriage rules, was made at 

the FCC. 

That minor confusion aside, as I have explained in my written 

testimony in greater detail, both the program access and program 

carriage rules are rights without remedies. There is no standstill 

provision that allows carriage during the pendency of litigation. 

Litigation goes on for months and years. In fact, I am unaware—— 

21 

Senator SPECTER. Mr. Schwartzman, I do not mean to unduly interrupt, but I have got less than 2 minutes left. What kind of assurances would you like from Mr. Roberts to satisfy the concerns 

you have stated? 

Mr. SCHWARTZMAN. Well, I am not sure that any concerns would 

satisfy me. I would point out that neither of those two sections applies to video on demand, which is a critical part of the milieu. 

Senator SPECTER. Well, if nothing would satisfy you, let me move 

to Dr. Cooper in the minute I have left. Would anything satisfy 

you? 

Mr. COOPER. Frankly, we believe that the anticompetitive effects 

that I have described are just too difficult to unravel. The remedies 

and promises are unenforceable in many cases. 

Senator SPECTER. Why? Why unenforceable? 

Mr. COOPER. Well, we have had two decades, and the FCC is constantly chasing around scofflaws who challenge the legality in 

court, engage in anticompetitive practices, and eventually get 

caught and say, ‘‘Well, we will be good.’’ So the answer is that we 

have suffered through decades of rising prices, of anticompetitive 

practices, and the set of policies we have on the books has not been 

able to prevent those practices in the market today. There is no 

reason to believe that a company with that much incentive and 

vertical integration will be tamed by the rules we have on the 

books. 

Senator SPECTER. So, Dr. Cooper, what you are saying is that 

there are some assurances which, if enforced, would be sufficient, 

but you doubt the FCC’s capability of enforcing them? 

Mr. COOPER. I certainly doubt the FCC’s capability of enforcing 

under the current statute as written. And so this merger—they 

want to proceed as quickly as possible under the current law. They 

promise they will obey the current law even if they overturn it in 

court. 

Senator SPECTER. My red light is not yet on, so I am going to ask 

Ms. Abdoulah if there is anything which would satisfy her. You can 

ask the question before the red light goes on. The rest is on you. 

Ms. ABDOULAH. OK, thank you. Absolutely, there is. Absolutely, 

there is. If this merger goes through, just the two things I said, 

that the terms and conditions for access to content are the same 

for Comcast as they are for the rest of us; and, secondarily, that 

there is a remedy structure that works so that when we do get into 

a bind, we need somewhere to go that we can have a hearing on 

what the issues are, have it within a reasonable timeframe at a 

reasonable cost, ensure that the product can continue to go on 

while there is the dispute, and—what is the other one? Oh, burden 

of proof, of course, that there be some pricing transparency from 

the DOJ that it is required to—the program is required to come 

and prove that their market pricing is truly competitive. 

Senator SPECTER. Thank you. 

Thank you, Mr. Chairman. 

Chairman KOHL. Thank you, Senator Specter. 

Senator Klobuchar. 

Senator KLOBUCHAR. Thank you very much, Mr. Chairman. 

Why don’t we start with where Ms. Abdoulah was, with Mr. 

Zucker or maybe specifically Mr. Roberts. I know that Ms. 

22 

Abdoulah mentioned the access issue, which I know you have been 

asked about, but how about the pricing transparency, something 

that should be a concern for consumers? 

Mr. ROBERTS. I want to just make some points about what Ms. 

Abdoulah just said, if I may. She said that arbitration is unfair because it puts the burden on the complaining distributor. We do not 

think that is true. The rule requires both the complaining distributor and the programmer to submit final offers, and each party 

has an equal burden to show that its final offer reflects the fairmarket value of programming. 

In terms of the timing, the FCC specifically established arbitration as a streamlined remedy, and under the rules the arbitrator 

is supposed to issue his decision within 30 days. In terms of keeping the content on the air, once the distributor triggers arbitration, 

the distributor is guaranteed continued carriage of the network—— 

Senator KLOBUCHAR. Okay. I was more interested in the transparency issue. 

Mr. ROBERTS. And so both sides put in their best offer, and they 

have to defend it to the arbitrator, which encourages you to have 

to make that case. 

And then, finally, I want to just state that the FCC under Chairman Genachowski has underway a proceeding to look at how the 

rules are working. We are participating in that process, and I hope 

you are as well, to try to tell the FCC how to improve it. 

Senator KLOBUCHAR. How about these issues that Mr. Cooper 

raised about just the price that I raised in my opening statement? 

How do you respond to this, the quadrupling of the price in some 

places? And what effect do you think this merger would have on 

the price for your average consumer for their cable? 

Mr. ROBERTS. So I think you have to say what are the consumer 

benefits here, and I believe using technology and innovation to deliver more content is what this deal is all about. Preservation of 

free broadcast, over-the-air television, which, as Mr. Zucker said, is 

not a sure thing, and additional investment. 

As to cable prices, I think we have a market structure existing 

today. Some of the issues that have been raised by some of the 

other witnesses are industry-wide issues. And I think that they are 

not really affected by this transition. We are not getting any larger 

in cable distribution here with this because NBC is not in our business, and we are not really in their business. I think that these are 

always questions that seem to be constantly evolving. 

Senator KLOBUCHAR. But do you have any prediction on how this 

would affect consumer rates, their monthly payment? 

Mr. ROBERTS. I do not believe this transaction affects that question. I think that question has been and is a relevant question, and 

I think that it is best directed to the entire industry. There are 

more distributors than ever before, which is putting more growth 

in content and has allowed an understanding that you do not just 

carry these channels. We pay $6 billion a year or so to buy cable 

channels. So there is a robust market, and there are more distributors, more supply and demand changes all the time. And I think 

that that is an industry-wide question, not specifically changed by 

this merger in—— 

23 

Senator KLOBUCHAR. I am going to ask Dr. Cooper and Mr. 

Schwartzman for their response to that, but just one other thing 

here is that on jobs, you know, we are very focused on jobs right 

now, if you have not noticed, in Washington, and with our unofficial unemployment rates 10 percent now nationwide, do you see 

this transaction as resulting in job loss? And, also, one of the public 

interest commitments you have made regarding this merger is that 

Comcast will honor NBC Universal’s collective bargaining agreements. Is that correct? 

Mr. ROBERTS. Yes, it is on the last part. We will honor those 

agreements. I think that is one of the best parts of this story, is 

that it is not based on eliminating jobs. It is a risk and a bet that 

America’s economy is turning around, advertising is going to come 

back, that content is going to be copy protected, and that business 

models will be found that are successful in the future and make 

this a good investment. There is no guarantee of that, and it is not 

based on elimination of jobs. 

Senator KLOBUCHAR. Okay. One last question before I turn to 

them. One of the advantages with nbc.com—I have used it myself— 

is the free—you can watch ‘‘Saturday Night Live’’ the next morning. Is that going to change with the proposed purchase and the 

hulu.com and those other attributes of nbc.com? 

Mr. ROBERTS. I would like to say—and maybe Mr. Zucker wants 

to comment on it as well—but I would say from Comcast’s perspective, we have no intention of changing any of the behavior that 

NBC has had. I think that regarding the Internet and video over 

the Internet, there were 30 billion videos last month over the Internet. Of all video viewed online; NBC has less than 1 percent; 

Comcast has less than half of 1 percent; Hulu has less than 4 percent; and Google has over 50 percent. It is a dynamic, rapidly 

changing market, but as a broadband company, we want to encourage as much video as possible because the fastest growing part of 

our company is broadband. We are now investing $1 billion to build 

something called wideband at 50 megabits a second and beyond. 

And when you say, ‘‘What are you going to do with wideband? ’’ The 

answer is, ‘‘We are not sure yet.’’ But we are making that investment now because we know consumers want more and more bandwidth for their—— 

Senator KLOBUCHAR. I want to give Dr. Cooper and Mr. 

Schwartzman a chance to respond. Just quickly, Mr. Zucker, on 

this issue of hulu.com and NBC. 

Mr. ZUCKER. You will still be able to watch ‘‘Saturday Night 

Live’’ on Sunday morning. 

Senator KLOBUCHAR. All right. Very good. 

Mr. Cooper and Mr. Schwartzman, I think specifically the response to this issue about how it will not affect the monthly cable 

rates. 

Mr. COOPER. Well, I have worked the numbers. I have shown you 

why there is an incentive to raise the prices. There is the ability 

to raise the prices. And let me work them one more time so you 

really can understand how the future is at stake here in terms of 

the Internet. 

TV Everywhere is not TV anybody. Comcast will only sell its 

Internet product to current subscribers of Comcast; that is, they 

24 

will sell it to one-quarter of the people in this country. They are 

dividing the market. 

Hulu and all of NBC’s products on the Internet are available to 

100 percent of the people in this country. And so you have this different incentive. 

If they take NBC in and they have made some vague promises 

about what they will do with NBC’s content, their objective is to 

extend the geographic division they have accomplished by refusing 

to ever overbuild a competitor. They have never overbuilt. That 

raises consumers’ prices because it diminishes competition. 

Senator KLOBUCHAR. Okay. Mr. Schwartzman, and then we will 

give them 1 minute to respond. 

Mr. SCHWARTZMAN. Senator Klobuchar, first of all, Mr. Roberts 

misstated what the program access rules require. The program access rules do not require arbitration, and that is not what 

Comcast’s written commitment to the FCC is. The arbitration provide to which you referred is part of a condition to the Adelphia 

merger, which expires in about a year and a half, and they did not 

commit to the FCC to the arbitration regime. 

Second, with respect to Hulu—excuse me, with respect to NBC 

programming, Hulu has denied access to—NBC and Hulu have denied access to NBC programming to existing over-the top video provider Roku. That is not hypothetical. That is a fact. So there is 

every reason to expect that the combined entity will have even 

greater reason to make that content unavailable to Internet competitors such as more networks, which is going to do a virtual cable 

network online. And they have every reason to withhold NBC programming from those online-only competitors. 

Senator KLOBUCHAR. Okay. Mr. Zucker, just 10 seconds, 20 seconds. 

Mr. ZUCKER. Thank you, Senator Klobuchar. The fact is from our 

perspective we license our content online to a multitude of distributors. They have to qualify in certain areas. They have to have an 

economic model that makes sense for us. They have to technically 

be able to distribute the content. It has to be in an environment 

that we want our content to be in. And they have to step up and 

protect our intellectual property. Assuming they meet all four criteria, we are open to that conversation with everybody, with anybody, but not everybody is capable of satisfying all four criteria. 

Mr. ROBERTS. If I may, just to correct the record so there is no 

misunderstanding. In response to Ms. Abdoulah, there was a specific sports network, I believe, in the Midwest that you were referring to, which is under that Adelphia order, and that is what she 

was, I believe—referring to. 

Senator KLOBUCHAR. We will try to clarify that afterward with 

maybe some letters and responses so we can get it clarified. Thank 

you very much, all of you. 

Chairman KOHL. Thank you, Senator Klobuchar. 

Senator Franken. 

Senator FRANKEN. Thank you, Mr. Chairman. Mr. Roberts, last 

week you came to my office to talk about the potential merger. I 

told you that I was worried that the merger would hurt consumers, 

but you assured me that the FCC has regulations called program 

carriage rules—these are not the access rules; these are the proVerDate Nov 24 2008 11:07 May 24, 2011 Jkt 066290 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\66290.TXT SJUD1 PsN: CMORC
25 

gram carriage rules—that protect consumers. You said that those 

rules will make sure that you always have a wide variety of programs because they forbid you from discriminating against other 

companies’ programs. 

Now, I have here Comcast’s argument from NFL Enterprises v. 

Comcast, a 2008 case in front of the FCC, where Comcast argued 

that, ‘‘The Commission simply is not equipped or constitutionally 

empowered to make an independent assessment of the myriad, 

complex, and dynamic considerations that affect carriage, tiering, 

and pricing decisions. Thus, the First Amendment requires that the 

Commission exercise extreme caution before interfering with any 

carriage decision.’’ 

So, in 2008, Comcast argued that the First Amendment precluded the FCC from enforcing its program carriage rules. In other 

words, looking to get approval for this merger, you sat there in my 

office and told me to my face that these rules would protect consumers. But your lawyers had just finished arguing in front of the 

Commission that it would be unconstitutional to apply these rules. 

Then, to add insult to injury, I asked you, right after you made 

this assertion in my office, whether you were aware that your company had litigated this, and you said, ‘‘I do not know.’’ And so I 

said, ‘‘Why don’t we ask one of your lawyers? ’’ because you had a 

number of lawyers there. And we turned to your lawyer, and you 

lawyer said, ‘‘Yeah, yeah, we did that. We did this.’’ 

And then you in your written testimony—and this is over a week 

ago that you came to my office in your written testimony, you 

again assert the same thing twice. ‘‘Moreover, the FCC’s rules governing program access, program carriage, and retransmission consent provide further safeguards for consumers. . .’’ That is on page 

4. Then on page 7, you do it again. Now, that was your written testimony that was submitted today. I noticed that today you added 

something about voluntarily being subject to the rules because you 

probably read Mr. Schwartzman’s and Mr. Cooper’s testimony 

which called you on this. But I have been through this fin-syn 

thing. 

Now, you came into my office—I am a United States Senator representing the people of Minnesota, people who buy cable, whose 

cable bills have gone up at three times the rate of inflation since 

1995. And my job is to protect the interests of the people of Minnesota. 

Now, how are Minnesotans to trust you when you come in and 

to my face say something that either you know was not true or you 

did not know—and I do not know which is worse. How are the people of Minnesota supposed to trust you? 

Mr. ROBERTS. Senator, first of all, our company has been doing 

business for a long time, and I think our reputation has—— 

Senator FRANKEN. Your reputation—— 

Mr. ROBERTS. Well, if I may, our reputation and our practices I 

think have been at the top of our industry, our innovation, and 

what we have achieved. When we met, perhaps I was confused. I 

thought we were talking about program access. Now you are talking about program carriage. I think in both cases—— 

26 

Senator FRANKEN. Your lawyer confirmed to me that they have 

litigated that, and you know that. You were in the room when your 

lawyer confirmed that. Did he not? 

Mr. ROBERTS. We were talking program access. You are talking 

about program carriage. I do not think that we are litigating the 

program carriage rules. The NFL list brought an arbitration or a 

program carriage question and—— 

Senator FRANKEN. Okay. Whether it was program access or program carriage, did you not say that this rule protects the people 

of Minnesota? And then did I not ask your lawyer, oh, aren’t you 

saying that it is unconstitutional in court? And then you said you 

did not know that, and then you write in your testimony, your written testimony for today, that these rules protect us. 

Mr. ROBERTS. Because our intentions, as I told you from the beginning, were not to change the way we have behaved for the last 

20 years—— 

Senator FRANKEN. Well, I think Minnesotans have their answers. 

Thank you very much. 

Let me go to Mr. Zucker. Look, we are friends, and I worked for 

a number of years with your wife, Karen, who is lovely, at ‘‘Saturday Night Live,’’ and she is a lot of fun and a great woman. And 

I loved my time at NBC, and I want you to know that. But as I 

said in my opening statement, I remember what happened in finsyn, and I think my characterization is pretty accurate, don’t you? 

Mr. ZUCKER. [pause] It is a long time ago, and I think there are 

a lot of factors that went into what happened back then. But—— 

Senator FRANKEN. Come on. 

Mr. ZUCKER. Well—— 

Senator FRANKEN. I mean, come on. You guys said, ‘‘We are in 

the business of ratings. Why would we favor our own programming? ’’ And it was 2 years later that your guys were saying to your 

stockholders that, ‘‘We are going to own most of our own programming.’’ And you know that. And you know that to get a program 

on your network that you often, very, very often say, ‘‘Well, we 

want to be partners in this.’’ 

Mr. ZUCKER. Well, I can tell you about what is happening today, 

and I think that that is probably most relevant here, and the most 

relevant fact of that is that NBC has just ordered 20 pilots for new 

shows next year. As you well know, NBC needs some better shows, 

so we have ordered 20 new potential programs. 

Senator FRANKEN. I think what you did was put an NBC 

produced show on at 10 o’clock for five nights a week, that’s what 

I think you did. But let me—what I am saying—— 

Mr. ZUCKER. Can I just—— 

Senator FRANKEN. Since the promises of fin-syn were not kept, 

what conditions would you have the Government put on you to 

make sure that what happened is fin-syn does not happen again? 

Mr. ZUCKER. I do not necessarily agree that the promises of finsyn were not kept. I think that it is a very complicated—— 

Senator FRANKEN. Can I ask Mr. Cooper then about that? 

Mr. ZUCKER. Well, am I able to answer the question? 

Senator FRANKEN. No, because I want to ask Mr. Cooper that, 

and then you can answer the question. How is that? 

27 

Mr. COOPER. If you go back in the record, you will find the same 

kinds of promises about how there would be all this independent 

programming, and if you look at the quality of independent programming that was put on the air during fin-syn, it was magnificent, and I will submit a report I did for the Independent Family 

Television—— 

Senator FRANKEN. Well, let us just speak to the—— 

Mr. COOPER. So the simple fact of the matter is that they said 

they would use independents. They drove them off the air, and that 

is when the quality of programming began to decline. 

Senator FRANKEN. Okay. So what—— 

Mr. ZUCKER. So what I would say is—— 

Senator FRANKEN. What restrictions would you have? 

Mr. ZUCKER. Let me make two points. 

Senator FRANKEN. Conditions, I mean. 

Mr. ZUCKER. Let me make two points, which is that if you look 

at the pilots that we just have ordered for next year, we have ordered 18 pilots. Seven of those 18 have nothing to do with NBC or 

NBC Universal, completely non-affiliated, meaning 39 percent. So 

40 percent of all the programs that we are trying to put on the air 

for next year have no affiliation, we have no financial interest 

whatsoever in those programs. 

Senator FRANKEN. So you have 60—you have an interest in 60 

percent. 

Mr. ZUCKER. Well, I would argue that 40 percent non-affiliated 

is a substantial number, and the fact is the burden and the risk 

of the financial burden that is required today, for us to take on 60 

percent is still quite high. 

Senator FRANKEN. Well, we are way over time, and I am sorry. 

I wanted to get to what conditions you thought we could put on if 

this thing went through to make this work, and then I wanted to 

ask the others what they thought of that. 

Chairman KOHL. Thank you very much, Senator Franken. 

Mr. Roberts, in your own FCC filing, you state that the NBC 

broadcast network is ‘‘an American icon,’’ which, of course, is very 

true. And, best of all, of course, it is available entirely free all 

across the country. Many are now worried about what the merger 

would mean for the future of free, over-the-air television. 

In your FCC merger filing, you have committed to ‘‘continuing to 

provide free, over-the-air television.’’ But this commitment also 

states that, ‘‘Comcast will continue its cooperative dialog with its 

affiliates toward a business model to sustain free, over-the-air service that can be workable in the evolving economic and technological 

environment.’’ 

We need to know what that means, Mr. Roberts. Do we have reason to worry that Comcast in the future will move the best programming ideas to NBC cable networks? And won’t Comcast have 

an incentive to do this? Because, obviously, it charges its customers 

for cable. Over-the-air is free. 

Mr. ROBERTS. Well, first of all, that is not our plan. We have 

never been in broadcasting, as you know, and we are committed— 

and that was our first commitment—to leaving and creating a vibrant NBC, trying to restore some of its glory, as Jeff just said, and 

28 

get back to better shows. Hopefully some of those pilots will take 

off. 

We will be hopefully able to help play a constructive role in retransmission consent, because today free, over-the-air television, as 

we know, is not as it was 20 years ago. On New Year’s Eve we saw 

Time Warner Cable and Fox hold an independent negotiation between an independent broadcaster and an independent cable distributor over retransmission fees. There is a change in the marketplace happening where cash payments are occurring for broadcast 

television to the broadcasters, which is, I am sure, quite welcome 

by the broadcasters. 

So we are committed to working with the NBC affiliates, trying 

to invest in the programming, and trying to build NBC, because 

the advertising model of NBC is so much different than the advertising model of a cable channel. And there is a great suite of cable 

channels that NBC has, but NBC itself is a huge priority both for 

local programming and for network programming to improve. And 

if I might, Mr. Zucker is more of an expert on it than I am, and 

he is already well equipped with knowledge of how retransmission 

consent is going. But by being both a cable company and a broadcaster, we think we can play a unique role in—even though there 

will be plenty of independent negotiations that we are not involved 

in,—trying to find constructive models to help the broadcast business thrive in the future. 

Mr. ZUCKER. If I may, Senator, I would say a couple things in 

response to your question, and then I would like to follow up on 

what Mr. Roberts said. 

The fact is the commitment to free, over-the-air broadcasting 

here is incredibly important, and maintaining that I think is probably the most exciting thing that Comcast has come to this joint 

venture with. 

The reach that NBC has, our ability to sell advertising on NBC 

as opposed to what we bring in on the cable networks, the fact that 

we do not only determine whether or not sports rights will be on 

NBC, but that is decided by leagues that give us the rights and 

things like that, I think this should give you and the Committee 

confidence that we want NBC to be strong and vibrant. Ten million 

people a night watch Brian Williams on ‘‘NBC Nightly News.’’ Six 

million people a morning watch the ‘‘Today’’ show and get their 

news from that. 

The reach of these incredibly important programs is something 

that we are incredibly proud of and that we will continue. 

With regard to broadcasting, I tried to make this point in my remarks earlier. Broadcasting has been troubled. The economics of 

broadcasting are not as good as the cable side. That is what we are 

talking about. But the fact that Mr. Roberts and Comcast have said 

that they are willing to step up and play a constructive role in the 

retransmission consent negotiations gives me more hope about the 

future of NBC than I have had in a long time. And I actually feel 

better about the future of broadcasting today. 

Chairman KOHL. I just want to ask you this question, though. 

There is no doubt that you offer compelling must-have programming on NBC, as we know. What is to stop Comcast, in any legal 

way what is to stop them if this merger is completed from moving 

29 

NBC broadcast content to cable? Is there anything in this deal that 

is going down that legally will prevent Comcast from taking any 

and every show or whatever they decide from NBC to cable? 

Mr. ZUCKER. But that would not be in their interest. There is 

nothing legally. Yes, I understand. 

Chairman KOHL. I understand that. But is there anything that 

would prevent that legally from happening? The answer is clearly 

no. 

Mr. ZUCKER. Legally, I do not believe—legally, no, sir. 

Chairman KOHL. I want to hear that from you, that if it makes 

economic sense at some point—which you say it never will, but if 

it does, there is nothing that would prevent Comcast from moving 

whatever they wish from NBC to cable, legally nothing to prevent 

them. Correct? 

Mr. ROBERTS. I think we have made a commitment; however, 

Senator, I guess there is always an extreme that you could say that 

something is theoretically possible someday. But I will tell you the 

commitment we intend to make binding with the FCC is our commitment to a robust NBC network similar to the kind of programming that it has today, free, over-the-air, and with a strong affiliate model. I am not quite sure how much you can do because certain rights holders decide where they want to put their programming and other things like that. But our goal, I believe our commitment and our actions are to restore NBC, and to invest in NBC. 

And that is the constructive dialog we are actually having with the 

NBC affiliates,—which is how to get that moving in the right direction. 

Chairman KOHL. Good. Thank you so much. 

Yes, Ms. Abdoulah. 

Ms. ABDOULAH. I was not going to bring up retrans, but since it 

has come to the forefront, I would like to just ask about that or 

comment about it. When I hear Comcast is going to play a constructive role, I mean, I do not know how we can make that retrans 

process constructive other than redoing it. In the 1992 act, when 

retrans was formed, I was in the business. I know why it happened. We had a lot of clout as cable operators, and the small 

broadcasters needed some protection. It made some sense. 

What has happened since then is the whole balance of power has 

gone totally upside down, and now these networks can come in and 

now negotiate retrans with us. As a matter of fact, in the past 2 

years—or in the last cycle of negotiations, WOW!’s retrans costs increased over 100 percent because these broadcasters can come in 

and demand not only carriage, if they went with ‘‘must carry,’’ but 

demand prices that nobody has any control over and very few of 

us have any leverage on. 

So retrans is a huge issue and needs to be reviewed and revised. 

Chairman KOHL. Yes, Mr. Schwartzman. 

Mr. SCHWARTZMAN. Senator, I want to make sure everybody understands what Mr. Roberts was saying. By playing a constructive 

role in retransmission consent, he means paying more for NBC programming. The industry standard are MFN agreements by which 

other network affiliates can charge the same rates. That gets 

passed on to Comcast and to every other cable operator in the 

30 

country. In short, Mr. Roberts just promised to raise everybody’s 

cable rates. 

Chairman KOHL. Oh, my goodness. Mr. Roberts, did you do that? 

[Laughter.] 

Mr. ROBERTS. No, I did not, Senator, and I believe that in light 

of some of the issues that Ms. Abdoulah raised, I just want to put 

things back in perspective for Mr. Schwartzman and others. We are 

still 80 percent a cable company after this transaction, and we 

have some of the same issues and same concerns. But we also now 

recognize that there are broadcast needs and cable needs. Congress, I believe, at some point, or others at the FCC will want to 

have discussions that affect the entire industry—both industries— 

and we can be a voice among many other voices to try to forge creative solutions. I was not referring to what he said. 

Ms. ABDOULAH. Good. 

Mr. ROBERTS. Thank you. 

Chairman KOHL. Before I pass it on to Senator Specter, I assume 

what you are saying is that programs like ‘‘NBC News,’’ the Olympics, ‘‘Sunday Night Football,’’ ‘‘The Tonight Show,’’ and ‘‘The Office,’’ for example, these things are going to stay on NBC. 

Mr. ROBERTS. Yes. 

Chairman KOHL. They are not going to be cable-ized. 

Mr. ROBERTS. That is certainly my hope—absolutely. 

Chairman KOHL. Well, hope is—— 

Mr. ROBERTS. Absolutely yes. 

Chairman KOHL. Yes. 

Mr. ROBERTS. And the only one that is up to somebody other 

than NBC would be NFL Football. They control those rights, not 

NBC. But ‘‘The Office’’ and ‘‘Saturday Night Live’’ are—certainly 

that is the intention, and, Jeff, you can speak for yourself. 

Chairman KOHL. Jeff, is that right? 

Mr. ZUCKER. Yes, sir. 

Chairman KOHL. Good. Senator Specter. 

Senator SPECTER. Mr. Roberts, when you were testifying earlier, 

you were trying to make a distinction between program access and 

program carriage, which you did not get a chance to conclude. 

What point were you trying to make on that? 

Mr. ROBERTS. Thank you. After the deal, six out of seven channels that Comcast carries—I am talking program carriage—are unaffiliated. 

The second point is that there are choices customers now have 

that were not around 20 years ago or even 10 years ago. So if we 

do not carry popular shows, such as the NFL Network, customers 

can choose to go somewhere else where they can get that programming. 

The third point is that regarding the cost of these channels, it 

is not just carriage the way it is with free broadcasting. As I mentioned, we spend about $6 billion a year. When a new network 

comes to us and says, ‘‘I want to be carried,’’ the reason there is 

tension at all is, one, do we have the bandwidth; but, two, and usually the significant tension is what is the cost to our consumers. Ultimately we are purchasing on their behalf and putting it in one 

of the many packages that we offer. 

31 

So you factor in what is our competitors’ behavior—satellite, 

phone company; what is the cost to the consumer; what is the quality of that programming; that in the end, 85 percent of the programming is owned by others; and we have got to be competitive, 

or else the customer is going to switch carriers. 

Senator SPECTER. When Senator Franken was questioning you, 

there appeared to be substantial differences as to what had occurred during the course of the discussions you had with him in his 

office. Would you care to amplify what happened there and why 

you are saying that you were providing information which was entirely accurate and trustworthy? 

Mr. ROBERTS. Yes. Well, first of all, it is the first time we have 

ever had a chance to meet in his office describing the deal. There 

is a couple-year-old appeal of whether the sunset rule should go 

away on program access. I did not remember that. To his point, it 

is an argument and fair question, as far as I am concerned, as to 

whether we would have these rules apply to us. 

The genuine intention from the day we have done this deal was 

to say we are comfortable with the rules we have lived with for the 

last 20 years. Commenting on whether they should be upheld by 

the courts or not for constitutional reasons was never our intention—and they have not been stricken by the courts. There have 

been many legal challenges over those 20 years as the market continues to evolve. And the market will continue to evolve in the future. There are rights as a speaker that—whether they are constitutional or not—lawyers love to challenge all the time, and I 

think that is legitimate as well. 

But from where I sit as a business person, our reason for wanting to buy NBC Universal is to invest in content, grow the business, preserve free broadcast television over the air, and to build 

a wonderful content company for the 21st century that will dynamically change Comcast from just a distributor. And we are very 

comfortable, and that is why today I wanted to clarify that, both 

in the written record and in this back-and-forth here. 

Senator SPECTER. These hearings do not allow the kind of full exchange necessary to really get to the bottom of things. There are 

time limits and complex questions and, necessarily, interruptions 

to try to move through in a hurried way. And I discussed with Senator Franken, when we went to vote—Senator Franken, if I may 

have your attention. I was just saying that you and I had a brief 

discussion when we went to vote about sitting down in a more elongated discussion to have an exchange which is not limited in time 

to get a fuller understanding exactly where you stand and exactly 

what Senator Franken’s concerns are. He is in a lot different position, having been an entertainer and on the TV shows. The best 

Senator Kohl and I do is C-SPAN2. 

[Laughter.] 

Senator SPECTER. So we are not in Senator Franken’s league. I 

had a little trouble following some of it myself, and he did not get 

a chance to finish his questioning of you because the time is limited. But we do the best we can of making a public record here, and 

these hearings go on all the time. Do you want to—I just want to 

say I welcome that. I also understand the—I was never involved 

32 

in fin-syn. Comcast was not a producer of broadcast shows, and I 

do not know what those commitments were. 

Senator SPECTER. Senator Franken is nodding in the affirmative. 

He agrees with you about something. 

Mr. ROBERTS. Thank you, Senator Specter. 

Senator SPECTER. You have heard, Mr. Roberts, quite a number 

of concerns expressed by Mr. Schwartzman, Dr. Cooper, and Ms. 

Abdoulah. On my time, would you care to identify any of them and 

respond at this moment? 

Mr. ROBERTS. Well, I think we have had, you know, a healthy exchange and perhaps disagreement of whether this is really a 

vertical integration; whether the cable industry over the last 30 

years has added great technological innovation; how competitive 

the industry has become; and where we might be headed in the future. In my opinion, companies need to take risks, make investments, and try to innovate. And what I see happening is an explosion of technological choices to the consumer and the wonderful 

content at NBC Universal. We want to try to accelerate how to 

make it more available, and our goal is to stimulate the technology 

that our company has traditionally built. 

When we first went to 20 channels, people said, ‘‘Why do you 

need 20 channels? ’’ When we went to 100 channels, people said, 

‘‘Why do you need 100? ’’ The first time we launched On Demand, 

we could not get movies. The main complaint, as you and I have 

talked in the past, that people have with our On Demand is how 

can we get more movies. Well, NBC Universal has 4,000 movies in 

their library. 

So we will do our very best to push the technology and the content to try to give the consumer that which we know they want, 

in a business model that can work for all parties, and at the same 

time change our company, as companies need to evolve. 

Senator SPECTER. Mr. Zucker, I will come to you in just a moment, in less than a moment. 

Well, I think that is important reassurance. My television watching is limited, but Turner Classic Movies is one of my favorites. In 

fact, it is my favorite, aside from sports, on TV and they are the 

old movies. And Comcast movies on demand could use improvement. 

[Laughter.] 

Senator SPECTER. You could use a—— 

Mr. ROBERTS. Yes, sir. 

Senator SPECTER. Now, Mr. Zucker, you may comment, and, Ms. 

Abdoulah, you had your hand up, you may comment on your own 

time because my red light is on. 

Mr. ZUCKER. If I may, I just wanted to make one comment, which 

is that there was a comment made earlier in the opening remarks 

that this was the biggest or most important media merger since 

Lucy and Desi. And I would just argue that I long for those days, 

and I wish these were the times of Lucy and Desi. But the fact is 

we are in an incredibly different era, and competition is much 

greater, the cost of programming is so much higher, and if NBC 

and broadcasting is going to survive, then we are going to have 

these honest discussions about how that will happen. And I think 

that one of the great things here is Comcast’s actual real commitVerDate Nov 24 2008 11:07 May 24, 2011 Jkt 066290 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\66290.TXT SJUD1 PsN: CMORC
33 

ment to ensuring that NBC and broadcasting survive. And it is a 

very different era than Lucy and Desi. 

Ms. ABDOULAH. Two quick things, if I may. 

Mr. Roberts is right. As operators, when we are considering what 

programming to carry, we do think about what is the cost to the 

customer. Unfortunately, it not market-based pricing. Unfortunately, the customer does not get to know what it is costing to deliver them this product because we are not allowed to talk about 

price. We are restricted from talking about price to our consumers 

or to each other. The only reason I know we pay more is because 

I have been on the large company side, so I know that we pay at 

least 25 to 30 percent more than our competitor does. And I just 

do not understand how that is good for consumers. 

I also do not understand, if the billions that are being spent in 

programming—which I respect and appreciate. The fact of the matter is a product is produced for a certain fixed cost, and then those 

costs are incurred by the operators. I do not understand why we 

as a smaller operator pay much more for that product—it is a fixed 

cost—than the larger operator does. It is very difficult to compete 

without that kind of transparency, without that kind of marketrationalized pricing, and it is wrong for consumers. They do not 

have the choice because we are told how to deliver the product. We 

are not able to deliver it in the way the customers have asked us 

to deliver it. 

Specifically, sports, if people want to just watch sports and pay 

more for it, we would love to put that on a tier. We are not allowed 

to do that. 

Family entertainment, if they just want a tier of family product 

entertainment, we are not allowed to tier that. 

If we want to put it on digital instead of expanded basic, we are 

not allowed to do that. We are told by the programmer how we are 

to distribute that product. 

That is not choice for the consumer. 

Mr. COOPER. I would offer two revolutionary business model innovations, one extending Ms. Abdoulah’s suggestion. If we want to 

talk about consumer choice, let us give them real choice. Let us 

give them a la carte choice. Instead of making them buy tiers, let 

us let them choose each channel they want to pay for. That would 

be a revolution. 

The second revolution, let us sell TV to everybody. There are no 

franchised service territories in cyberspace. There are no building 

requirements in cyberspace. It is easy to sell TV to everybody. So 

let us let everybody sell TV to everybody else, instead of dividing 

the market as TV and everywhere does. 

Those would be revolutionary, innovative business models which 

would shake this industry up something fierce compared to the 

modest rivalry you have today. 

Senator SPECTER. Thank you, Mr. Chairman. 

Chairman KOHL. Senator Franken. 

Senator FRANKEN. Thank you, Mr. Chairman. 

I would be happy to meet with you and Senator Specter, Mr. 

Roberts. We might include maybe Mr. Cooper in that conversation. 

Mr. Cooper, Mr. Roberts was talking about the reputation of 

Comcast. You in your testimony said that Comcast is on record 

34 

lying to a Federal agency regarding whether they blocked Internet 

users’ access to competing application for anticompetitive purposes. 

I assume you are referring to Comcast’s testimony about blocking 

BitTorrent, a peer-to-peer file sharing application. Is that right? 

Mr. COOPER. Yes, I think one of the incidents that Mr. Roberts 

does not point to in defense of his honor is this question of, Were 

they blocking? Well, they were not. Then they said they were. 

What were they doing? 

In the end, they were interfering with the flow of video traffic, 

and they were not forthcoming about what happened. Obviously, 

that is another one of these court cases they are involved in, in 

which they—— 

Senator FRANKEN. Well, let us talk about these cases, and I do, 

Jeff, want to get back to the last question I asked you. But trying 

to resolve these things before the FCC, carriage complaints and access complaints, these are incredibly—it is like impossible, right? 

And the burden—do you want to go to this, Mr. Schwartzman? 

Mr. SCHWARTZMAN. Yes. A promise to abide by the existing rules 

is a meaningless promise. I looked, and I may have missed something, but I am unaware of the FCC ever ruling in favor of a complainant in a program access case. 

As Ms. Abdoulah explained, in order to pursue one of these complaints, you need information that you do not have, and if you cannot provide the information, you do not meet the very high initial 

burden that the FCC places on pursuing a complaint. The burden 

is on the complainants to provide information they do not have and 

cannot obtain. It is a right without a remedy. 

Senator FRANKEN. And there is only one administrative law 

judge at the FCC now. Is that right? 

Mr. SCHWARTZMAN. That is correct. 

Senator FRANKEN. Okay. Look, I have had this history where I 

have seen NBC and I have seen other networks promise something 

and then do the 180-degree turn on it. There is no question about 

that. People in my industry—or my former industry—they know 

that. You came into my office, and you did tell me something 

that—and I asked you a question, and you did not know, and your 

lawyers confirmed that you had gone after the very rules that you 

said that would protect the consumer. That happened. It did. 

Now I will go to Jeff. Given that it is really hard to trust you 

guys, from my point of view, and given that resolving these matters 

is so one-sided in favor of the big guy, and this merger makes you 

so big, what kind of commitments do you think you should be held 

to that can be made that would make it feasible for anyone looking 

at this objectively to feel good about it? 

Mr. ZUCKER. I think you should hold us to the 17 commitments 

that we have made in our FCC filing that we have said we will 

abide by as a condition of this deal. 

Senator FRANKEN. Okay. Mr. Cooper, do you think that that is 

sufficient? You have read those, have you? 

Mr. COOPER. Well, they do not address the competitive problems, 

but I want to go to the enforcement question. He makes the commitment to you. You cannot do anything to him when he violates 

it. You have to find an agent to enforce that. 

Senator FRANKEN. I could call him back here. 

35 

Mr. COOPER. You could call him back here and give him a hard 

time, but—— 

Senator FRANKEN. That is about it, right? 

Mr. COOPER. The FCC cannot do it. The DOJ does not like to do 

it. So the real answer is: Do not let the market power be created 

if you cannot really enforce and police the commitments. And you 

cannot. 

Senator FRANKEN. Now, let me ask you about this. This is a big 

issue about the cost to the consumer, your cable bill, and it has 

gone up about three times the rate of inflation, I think, over the 

last—since 1995. And this idea of—this is about access, program 

access rules. So now you have to—NBC and Comcast, by the rules, 

have to provide its programming to other cable carriers—all 

right?—and it has to charge them what they are charged, what 

NBCU is charged for the program, for the network, for NBC or 

CNBC or A&E, Bravo, whatever. 

Did you, Mr. Cooper or Mr. Schwartzman, buy what Mr. Roberts 

said about them not being able to charge more and take it from one 

pocket into another pocket? Did you buy that at all, especially the 

part about now that they are together, they are even in less position to do it, because NBC now can charge whatever it wants to 

charge, but they would not be able to together, I mean, that actually by combining they would be less able to do this? 

Mr. COOPER. Well, three-quarters of the pockets are not one 

pocket to the other. It is reaching into the consumer’s pocket who 

is served by another cable operator. They increase their profit by 

raising the transmission—— 

Senator FRANKEN. I understand that, but what I am saying is 

that if they double what NBC costs to carry, they can charge themselves double, but it is going from one pocket to the other, but that 

means every other cable carrier is charged double for that, and 

their cable rates go up. 

Mr. COOPER. Absolutely. 

Senator FRANKEN. And the answer to that from Mr. Roberts was 

that he is actually in a worse position to do that. Does that hold 

water? 

Mr. COOPER. It does not hold water. His prices have gone up. His 

profit margins on cable have gone up. And he has more than covered any increase in costs, so he can pass them through, and he 

ends up with more profit in his pocket when retrans—— 

Senator FRANKEN. We are talking about charging extra for NBC 

or charging extra for—— 

Mr. COOPER. Extra for NBC or bigger bundles and charging Ms. 

Abdoulah higher prices. 

Senator FRANKEN. And Jeff is really raising his hand, and I 

should recognize him. But then I want to go back to Mr. 

Schwartzman to answer that as well. 

Mr. ZUCKER. Thank you, Senator. I think you have to take a step 

back and realize the real world that we live in. I want my programming to be carried by every distributor, and if the price is too artificially high, that is not going to happen. So the real world that we 

live in, if the 3 distributors do not want to—if the price is too high, 

they are not going to carry out networks and our programs, and 

that is not—that is not in our interest. 

36 

Senator FRANKEN. If a cable company wants to carry ‘‘Saturday 

Night Live,’’ and they cannot, they are not—no one is going to use 

that cable company. They have to—they have to get NBC. It would 

be death to any cable company. So you can—maybe you are not 

going to charge them ten times as much, but you can charge them 

twice as much. 

Mr. SCHWARTZMAN. Well, my time is up, so I am sorry. 

Chairman KOHL. Mr. Schwartzman can answer the question, and 

then we will—— 

Senator FRANKEN. Okay. 

Mr. SCHWARTZMAN. Thank you, Mr. Chairman. This may be a 

first in the history of the Senate, but I do not have anything to 

add. 

Ms. ABDOULAH. Could I take your time? I just want to acknowledge, video subscription revenue, our revenues on video have risen 

35 percent. However, our programming costs have increased by 81 

percent. We pay—it is very hard for us to compete for customers 

with a large competitor like Comcast who enjoys lower rates, lower 

costs than we do. They have promotions, for example, for digital 

cable, $30 a month. Our costs on that are close to $27, so we cannot do the same kind of offers. 

Chairman KOHL. I have one question for you, Mr. Roberts, and 

then we will end the hearing. One bright spot for competition has 

been the development of the Internet as an alternative for consumers to view video content. Because of the rapid deployment of 

high-speed Internet connections, millions of consumers now access 

TV programming from websites such as Hulu or Apple TV without 

paying the cable or satellite companies anything. Some consumers 

have even cut the cord and rely solely on the Internet to watch programming. Competition in this area is an encouraging development. 

However, we have recently heard from some programmers who 

allege that cable TV companies are demanding that the programmer refuse to make its programming available over the Internet as a condition to getting carried on cable TV. This applies to 

archives of old programming in addition to current content. And 

programmers are in no position but to accede to such a condition 

in order to reach the tens of millions of cable subscribers. 

Does Comcast demand that programmers keep their content off 

non-Comcast Internet websites in order to be carried on Comcast 

in some circumstances? And will you pledge not to do so? 

Mr. ROBERTS. I will tell you that what we have done and what 

I will pledge to do for sure and continue to do is to license content. 

We never say to anyone you cannot sell that content to anyone else. 

We have windows where there are certain times where that content may be just advertising supported. There are times when it is 

subscription. There are times when it is pay-per-view. So different 

types of content have different windows. That has been true for 

Hollywood movies, right to the cable channels that we carry today. 

So if you are taking a channel in its entirety and you are paying 

hundreds of millions of dollars a year to carry that channel—they 

are free to sell it to anybody they want to in the same manner that 

they sell it to us, or any other terms—to my knowledge we have 

never said they cannot sell it to some other area of distribution. 

37 

Sometimes they may create a new window, and there is a discussion of how long that window is until they want to change the 

model from a subscription model to an advertising-supported 

model. There are sometimes models windows ahead of us, which 

are the pay-per-view model. 

We believe this is a burgeoning area, and we should all be trying 

to find a way to get this content in front of the consumer. We have 

a vision called Project Infinity that is literally any content you 

want, at any time you want, on any device you want. We leave it 

to the content company to establish the practices of whether that 

is pay, subscription, advertising-supported, or part of some other 

bundle. And our technology vision is how to make that happen faster and have unlimited access for the consumer to that amount of 

content. 

Chairman KOHL. Good. Well, this will bring the hearing to a 

close. It has been very informative and we think very important for 

the Justice Department and the FCC to examine this issue very 

carefully, take into consideration the things that have been brought 

out in these hearings, and maybe perhaps if it decides to allow it, 

to establish what conditions to put on the deal. I do not know how 

it will develop, but that certainly is a possibility. 

Thank you all for being here, and I particularly thank the witnesses. 

[Whereupon, at 5:04 p.m., the Subcommittee was adjourned.] 

[Questions and answers and submissions for the record follow.] 

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