the audit

A Scalpel We Can Believe In

Obama's antitrust regime and the proposed Comcast/NBC merger
September 27, 2010

If you want to poke another hole in the idea that the Obama administration is “anti-business” take a look at its antitrust record. He came into Washington talking a good game, but has delivered the pro-corporate line there that has marked his other economic and business policies, run as they have been by Rubin disciples and former industry self-regulators and corporate lobbyists.

A couple of headlines sixteen months apart just about sum it up:

Here’s a New York Times headline from May 11, 2009:

Obama Takes Tougher Antitrust Line

The Washington Post, September 8, 2010:

Obama antitrust enforcement looking like more of the same

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This New York Times story this morning about Comcast’s proposed merger with NBC Universal got me thinking about this. It’s not a very good story, alas. It’s focused on how Comcast is dropping big bucks to buy approval of its deal, but the paper doesn’t do a good job of showing it doing so:

Because not all of Comcast’s persuasive techniques are subject to disclosure, it is impossible to know exactly how much money has been spent. But the Center for Responsive Politics, which operates, said that through June, Comcast had paid $6.9 million to lobbyists. It paid $12.6 million in 2009. Ms. Fitzmaurice said only some of the “modest uptick” is because of the merger.

According to disclosure forms, Comcast has about 30 lobbying firms on its payroll. recently added Comcast to its list of so-called Heavy Hitters, the groups that “consistently bring the biggest bags of cash to political fights.”

Contributions to political campaigns in the current election cycle on behalf of Comcast or its employees have not differed much from the election in 2008. That year, Comcast gave almost $3 million to candidates, compared with about $2.5 million so far in this election year.

So its lobbying spending went from $12.6 million to a $13.8 million annual rate? That’s a 9.5 percent increase. And it’s actually given out less money (so far, anyway) to candidates than it did two years ago. The Times also reports that Comcast set up a $20 million minority fund, but we’re not told precisely what that has to do with the deal lobbying campaign.

Compare the Times‘s weak evidence for its thesis with that from a Sacramento Bee op-ed two weeks ago by law professor Susan Crawford, who’s writing a book on the deal and who the NYT actually quotes in its story:

Comcast spent nearly $90 million in the first two quarters of 2010 on efforts to support the deal; promised $20 million in venture funding for minority entrepreneurs; pledged $6 million to support independent productions; agreed to place a Latino member on its corporate board of directors; made deals with NBC’s affiliates; and hired (with NBCU) more than 100 former government employees to shepherd the deal through – including several former chiefs of staff to key legislators and policy-makers.

The Times does better about how Comcast is calling in chits with nonprofits it has funded in the past. This is a good catch, for instance:

In one of the letters on file with the F.C.C. that is representative of many others, the director of a Boys and Girls Club in Burlington, Vt., wrote that she “recently learned” of the pending transaction with NBC, and continued: “I wanted to take a moment to share some of the positive experiences our organization has had with Comcast and explain why I view the company as a genuinely admirable corporate citizen and valuable member of our Burlington community.”

In an interview, Mary Alice McKenzie, the executive director of the club, said that Comcast had given her organization a $20,000 grant to buy computers and other equipment. “The point of the program is to increase digital literacy,” she said. She said that the letter had been sent to the F.C.C. after she was contacted by Comcast and provided with a draft. She said she had reviewed it, made some changes and then signed it.

But the piece gives the actual story that matters—whether the deal is bad for consumers or not—short shrift, focusing instead on Comcast’s machinations to get it passed. It’s a perfectly legitimate angle, of course, to look at the corporate giant’s lobbying push, but readers ought to get better background on why they should care about it and how it will affect them. All we get on that front is Comcast flackery:

It says the merger is pro-competitive and in the public interest, promising fuller access to TV shows, movies and news. A recent full-page ad in The Washington Post featured a smiling young couple and the quote, “More ways to enjoy our TV, computer and even mobile devices? Sounds good to me.”

Sounds like BS to me! But is it? We’re not told. The anti-Comcast side doesn’t get to make a case here, other than to carp about Comcast’s heavy-handed lobbying push.

Again, it’s great to zoom in on the process-oriented stories—they definitely matter—but they ought to have some substance to beef them up.

How could it possibly be a good thing to let the country’s biggest cable company merge with one of its biggest content providers? What good could this possibly do to promote competition? What are Comcast’s lobbyists actually saying behind closed doors? More broadly, why has the Obama administration caved on its promises of vigorous antitrust enforcement?

That’s what I’d like to know.

It seems from the WaPo article above that based on its past stances, the Comcast/NBC deal is a fait accompli—maybe with a few tweaks. Here’s that good story:

Likewise, the antitrust division has shown itself more likely to use a scalpel than a blunt instrument when a merger has crossed its desk. When faced with mergers it worries will hurt competition, the Justice Department has forced companies to make some changes, such as spinning off a business line. But with one exception involving dairy processors, it has not gone to court to block deals, including the controversial marriage of Ticketmaster and Live Nation, the recent United-Continental airline merger and the union of the two biggest makers of voting machines in the nation.

So much for that tough line on antitrust.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.