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an analysis of congressional hearings on the proposed merger of comcast and nbc universal. our guests are joelle tessler of the associated press and amy schatz of "the wall street journal". >> host: well, this week in the house and senate the nbc comcast merger proposal was the focus of two hearings, one in the house and one in the senate, and that's our focus this week on "the communicators". joining us to analyze what happened this week is amy schatz of "the wall street journal" and joelle tessler of the associated press. joelle tessler, what is the headline from this week's hearings on the nbc comcast proposed merger? >> guest: one of the things to keep in mind is a dozen have to be approved it by congress but the justice department and that fcc so it is an indirect influence that congress can have but i think it's likely to be approved probably with conditions and the democrats raised a number of issues that

could be addressed attached approval. >> host: such as what issues? >> guest: one of the biggest ones is what will happen and to programming that comcast will acquire through this combination because right now comcast owns some cable channels but really primarily distribution company whereas nbc is a media company and a on a lot of the programming, obviously the nbc network and sports programming and the concern is that comcast will put a stranglehold on matt programming and basically put competitors at a disadvantage, satellite companies providing video services and so they want to ensure that competitors can get access to that program and at bear rates and on their terms and as likely to be at least one of the key issues addressed three condition and. >> host: amy schatz, did this breakdown a hearing on partisan

lines? >> guest: basically, you saw democrats and republicans showed up but there were that many there. basically democrats are talking in one of the most interesting things about the house hearing in the morning and senate hearing in the judiciary antitrust committee in the afternoon was that none of the lawmakers said they thought the deal should not be approved. mostly they were talking about what kind of conditions should you oppose on the deal so that consumers aren't honda and our competitors aren't harmed or that comcast be combined with nbc with too much market power and that was an interesting thing because as she said congress doesn't have to approve the deal would, but is upset about it they can put pressure on the fcc and the justice department to do a little more and were tried to stolid or killed altogether so that was an interesting part. basically it was down party lines with republicans say there's not that any competitive

issues because comcast and nbc don't compete in each other's markets, democrats say this could really lead to higher prices for consumers and thus could really hurt comcast competitors trying to get programming or seized from comcast. >> host: two of the lawmakers who did show up, energy commerce chairman henry waxman and the ranking member of the telecommunications subcommittee, cliff stearns, republican of florida, had an exchange regarding the proposed merger. here it is. >> comcast as all this note is the largest video programming distributor and nbc is the nation's fourth largest media and entertainment company. quote nevertheless, there is in my opinion little to suggest that a comcast nbc with combination that was serious salim threat of competition in the media and entertainment industries. we all know this is a highlight

competitive segment of the economy and ultimately consumers stand to benefit. since nbc and comcast do not compete in most segments of the market this deal will not bring about consolidation so to speak, comcast has interests only in five wholly owned and six partially own national cable networks. soo gather these networks will only represent about 3 percent of national cable network advertising an affiliate's revenue. the. >> with the proposed combination of comcast and vc announced last year i said that this transaction have the potential to shake and reshape the media marketplace in raise fundamental questions regarding diversity, competition and the future of the production and distribution of video content. i urge the fcc and the prime of justice to assess a rigorously whether this is in the public interest. two months have passed as this

transaction was announced and after additional review and now even more certain that this new joint venture and approved could trigger dramatic changes in the way consumers access video programming in no way the independent programmers to distribute their works. and also in the way of video and distributors compete for customers. >> host: wamp joelle tessler, what did you hear in that exchange? >> guest: i think kristin scott to the heart of one of the biggest issues that is going to be involved in the focus of the review which is essentially what kind of accommodation is this out what type of antitrust issues does that raise and what chris stearns point was making was these operate in different businesses and don't overlap. and comcast is a distribution company, they provide cable services, provided broadband connections to the internet

whereas nbc as a media company, essentially are in different businesses and that's what a lot of the republicans feel this doesn't raise traditional antitrust concerns and it should go forward without conditions with some of them believe but the concern is really which you have here is a vertical integration. you have the company that already owns all the pipes that go into people's homes to deliver content will now own a mac so that raises it issues, not a matter of two companies reducing the amount of competition. it's about comcast whether they will use with their hold over the must have programming that nbc will bring to put competitors at a disadvantage. it raises a number of issues -- the program access problems but gets into questions about wilma comcast and allow more independent networks on his own and cable system sensible have so much of its own programming that competes with the networks

with the nbc acquisition. and that's really one of the issues at the heart of the review at the fcc and doj especially. >> guest: one of the other interesting issues that chairman waxman brought up was really the issue of online video and what kind of power comcast will have moving forward because comcast really is a distribution company and is to be its cable but they also distribute internet and they're one of the largest providers so when you are combining internet lines like that and also content with nbc content and partial ownership of a one of the major on-line video places where people go to watch tv shows now for free, when you combine that together that as a whole different issue and that was one of the major focus is a both of the hearings that henry waxman brought up. some of the other members did to where they're asking about what kind of our power is comcast oy to have on the on-line video field and how will that impact

the local station owners and how will it impact other cable providers in the future of. >> host: welcome to another piece of video from thursday hearing was in the house subcommittee chair, rick bowsher, a democrat of virginia and he talked to both jeff zucker and piven and brian roberts of comcast about on-line programs and here's what he had to say. >> one about boxing? jeff zucker coming to or in a better position to answer. did hutto block the boxers from access won? >> this was a tissue -- issued by the management of what boxing was doing was illegally taking the content that was on a without business deals and walnut -- we have several distributors, many distributors of the hulu content that we have an illegal distribution deals with so we don't preclude distribution deals but preclude those illegally taking the content. >> would you have negotiations?

>> we are open and into negotiations. >> one further question and my time has expired, can the two view offers u.s. insurance that the programs with that are delivered over the air above by nbc today are then available long on the nbc.com website for online and will not migrate into the tv every where format so that they then would be available only to people who have cable subscription? canyon give us assurance? >> yes. >> guest: the exchange was fun because just a few hours after that exchange boxing came out with the statement said we don't know where jeff zucker came up with that because they said we are not illegally taking in hulu and having that for people who don't use it, it's a program and you have on your pc and allows you to have cables on your laptop and pop them into digital tv you can watch streaming video

that you would normally watch not on your tv. hulu had been blocked for a while and after it that exchange with boxing came out with a statement saying we would love to talk to hulu about this and we would love to it not have this problem. it's right that hulu management has a problem with boxing but the management said it was because of nbc so they basically said in their statement we would love to talk to jeff zucker about licensing deal for those bought the fcc says the they will do it now we will try. that was an interesting exchange and is one that will keep coming up because this is an issue where people are starting to watch more tv now and watch c-span online, watch other things on-line, it's really to then one of eliot's are worried about as you are moving toward an and more people watch it on-line the people who control the video and the content, how

will they use the market power to prevent other companies from getting its. >> host: joelle tessler, anything to add a? >> guest: i think it raises -- one thing to add on to the boxing exchange which amy was talking about is what i believe that it was -- there's some difference in opinion about exactly in the mid the decision to block hulu content from boxy because essentially i believe that was nbc that pressure the management of hulu to do that and meanwhile at the hearing yesterday jeff zucker said that was made by hulu management by going back to the broader point, what this really gets that is the intent, we as a said more and more are watching video on the internet and then the question of where a company like comcast is the nation wise largest cable company do they see the internet as a threat to their core cable business.

in it's really unclear. they say they don't, they say that they actually think that the internet is a good thing and will expand their business and they want to allow people to watch programming in any form in any type of device they want and delivered to them as they say wherever they wanted. by did is a significant threat. the question is are they going to move out programming that right now is available for free both over the air programming from nbc and available online, while they move it behind access to programming why our online or will you have to pay similar to the way you pay for television service like cable. >> host: joelle tessler, both you and amy schatz mentioned that congress really doesn't have a role in saying yea or nay to this joint venture or merger. but to use the congress and individual members working to get concessions from nbc and/or

comcast to sign off on the steel? >> guest: yes, i think actually and amy can jump in here but i imagine that i'm sure they will weigh in with the company's but i imagine the oppression -- pressure will fall more on the fcc and doj, likely to influence the analysis that goes on of the agencies that are actually doing the review of the process and that's how they could influence the outcome of the reviews and what types of conditions attached. >> guest: it gets dicey because a lot of members of congress accept campaign contributions from these companies and so if you are a member you can't say i really think this deal should be approved, fcc, you should do that. ming gets really bad actually if you have that huge campaign contributions and from nbc are comcast and often they will say these are a lot of issues that we think the agency should look

at and we think this is a concern and and they will send a letter or have a hearing and talk to the agency about that and tried to pressure them. it's slightly different but they can't say you've got to approve this now because it's really important for the american people, that's not looking very good. >> host: two more members talked about who has authority to yea or nay this deal, john shimkus, republican of arizona and anna eshoo, a california. >> there may be different issues dealing today and i want to make a clear i do not want the department of justice and 19 policy, that's our job and i would be careful were members to another way giving up our responsibility is on telecom policy by enacting processing and procedures and using this in the department of justice to do that. so that's kind of where i stand here and in a possible increase

universal is possibly good and i hope this merger will facilitate the creation of more popular programming choices of americans. one of the great exports our country has is armenia, american films, television shows are one of the ways we rich cultures that around the world and i also would not sure that is always a good reach of culture and i do question some of the things are consumers like to watch and what we do sell abroad and i think it does sometimes not put the best focus on us as a culture. >> communications megamerger is as well as those and other industry sectors have the potential to create monopolistic titans. the department of justice will ensure that this merger doesn't violate our antitrust laws but they fcc has a special burden. it must also ensure that this merger protect the public interest. the comcast and vc universal merger is not just about the

purchase and sale of private businesses, it involves the transfer of public property. broadcast licenses to operate on america spectrum. just as importantly if left unchecked this merger has potential to place chokehold on the transfer of information on the internet to consumers today and well into their future. if anything, this proposed merger i think demonstrates why we needed neutrality across the board. >> host: . >> guest: both of those, i can't remember shimkus, i think he was talking about the neutrality when he was bringing up his concerns about the department of justice m.s. fcc. basically making policy to mergers. that is something republicans complain about and they complain when kevin martin was the chairman of the fcc in charge because the fcc why is two basically. policy and merger conditions because they can do a lot with merger conditions. in get companies to create a lot

and that's something that we're seeing with the neutrality which is something that comcast is needy been because they done a petty lawsuit against the agency about this and the democrats would like to see that neutrality conditions put on this merger. republicans still want to see that and comcast doesn't want to see that in comcast along with the republicans are arguing that it doesn't make sense to impose the condition only on comcast as part of the merger condition because it wouldn't apply to at&t, verizon or other comcast competitors. that's one of those things we are going to see as we go along what the justice and thus fcc does but there will be pressure on the hill of both sides to get some kind of mentality condition put on this thing. >> host: joelle tessler. >> guest: it's interesting because comcast is in the middle of this and related fight with the fcc of verne and a tally of

which is played out in the course in washington. and that stems from an action taken under the previous fcc chairman kevin martin. he essentially ordered in comcast to stop blocking traffic on-line peer-to-peer sharing traffic, a service called bittorrent, and in that case comcast said it was blocking and bittorrent traffic because it was very intensive traffic and eating up the band with and slowing down the networks but a lot of people feel that they were slowing down or blocking bittorrent traffic because they saw while sharing as a training video on the internet and comcast saw that as a threat to its core business. so you've got that plank out because comcast challenged that order in court and at oral arguments of a few weeks ago in washington the judges essentially really cast down on the fcc authority to mandate

that neutrality rules so that as a backdrop to was happening now because the concern becomes even bigger when you talk about in the context of the comcast and vc merger because you are allowing comcast which owns the pipe to on the content as well to nbc and the concern is what they do which would violate the neutrality is favor their own content, but competing content and disadvantaged, try to block the core business competition and being video delivered over television. so that whole dynamic is played out in the background here and comcast said they don't want that neutrality to be decided as part of this condition to this merger, that has to be addressed separately in a court case and proceeding at the fcc to adapt the rules going on as well. >> host: amy schatz, where do we stand as far as this , first of all, is in a merger joint-venture, what should we call an officially?

>> guest: is a joint venture, not necessarily a merger because they are talking about creating basically different kind of company controlled by comcast because comcast is buying 51 percent of nbc and ge will have the other 49 percent for a few years so we're calling in a joint venture in some call it a merger. >> host: so where do we stand? comcast has submitted paperwork to the fcc, correct? and they said that the application? >> guest: they submitted actually application to the doj war last week and a recently submitted 145 page document to the fcc when they talked basically about why this was in the interest of the public and why they do they saw some things for consumers and how this doesn't have a competitive concern and they stated in 145 pages why this is a good deal and they still have to file and may have just filed a formal paperwork to transfer the

licenses. really what then fcc has to do is agree to transfer the licenses from the control of ge to comcast. >> guest: let me add a year which is just billy on what amy says is essentially the review at the justice a permit is likely to be focused on antitrust issues and that goes back to the point that this is a vertical merger rather than horizontal so the antitrust issues, what does it bring up says we're not talking about eliminating a competitor or two companies merging. so where as the fcc review is probably going to be broader, because they have authority over the broadcast licenses they will look at things like is this in the public interest and i look at things like willet prompt more local programming, what about diversity. that will focus on the antitrust issues and will be broader than that at all so does this promote

the public interest. >> host: one of the test of fires at a house hearing yesterday was connie -- colleen abdoulah with wow!, a cable provider and here's an exchange she had with cliff stearns and brian roberts. >> given the comcast would have been gaining a new cable properties to compete with your company, one advantage with this came from the withholding content from you or your customers? >> web advantage? i can't talk for the same content, i don't have access to the content, where does my customer go to my competitor to it comcast? >> mr. roberts, you might want to comment on either her comments were dr. cooper's? >> i go back to the principle here. first of all, content is going to be made available to competitors and is available today. the last two years comcast loss nationally and over about a

million and have customers wow satellite and a wide open west have added over 7 million. in crack the second and third largest distributors in today are two satellite companies. so there is a very competitive market. one of the reasons we want to get more invested in content is we see the value of that growing and i think the premise of the way you phrase the question i agree with witches will be well served to make that content available to all the growing players in the marketplace. so this will ultimately lead to more innovation, more content creation, we see it as a growing business and i'm sure we will talk about the intellectual property and how to protect it. we're very much focused on the same issue and i think we recognize this is a very competitive video distribution market place and this is an opportunity to participate in the growing parts and as the

internet grows as the chairman asked we want to see the contents available and growing for the consumer because that's what they want to be. >> may i respond to this clarification? quickly. >> is not just about withholding, it's also about putting restrictions and conditions on how we offer that content. those are two things that we need to consider because that happens as well. >> joelle tessler is that one of the antitrust issue doj lookbacks. >> guest: as one of the biggest issues that will come up in the reviews which is what happens when you allow comcast which competes with satellite companies and cable companies, competes with verizon and at&t which rolled up their own video services. when you give comcast control of this much programming the nbc network, sports programming, as

the executive from wideopenwest said, how is she going to be if she doesn't have access. her customers will go to the competitor and that really is to the .7 is not a chorus of all merger because nbc and comcast aren't in different businesses and the comcast executive team making the point over any said in the testimony. but the point is it raises a different sense of antitrust concerns. the regulators reviewing will have to really address that to make sure that competitors can still access to the programming they need it. one thing alan and is there are rules in place that were put in by the 1992 cable act forced by the fcc that require cable companies to give competitors access to the programming that they owned. essentially to treat them the same as they own network in negotiations in terms of how much money they pay for access and the rates in the terms of

carriage. comcast said repeatedly those roles are in place and we will abide by them so there is existing protections that there is no need to have a competitor so concerned when at the same time the rules are challenged in court and comcast is one of the company's that brought that challenge and cable mission leading it. there is also concern among the competing video providers the rules on that meaningful anyway. what they want to see is finding arbitration, they feel the fcc has been aggressive in enforcing the rules to ensure they can get access to content on a pair terms. >> guest: one of the things the wow! executive was talking about, she was worried about after this bank will she still be able to get brawl and the golf channel or will she still be able to get entertainment, they're going to subscribe to comcast or whoever.

so she really worried about that issue is also talking about in the hearings in contrast with the internet and she was going to provide internet video service for her customers then she needs to get access to the on-line video streams so those channels two and right now not sure the fcc will apply to the internet flows of those channels so that was another issue that they were talking about and both of the hearings that will come upon the fcc side. >> host: to find out topics to talk about before we close up in amy schatz we will start, there was a senate hearing on thursday of this week on this issue. jeff zucker and mr. roberts testified there also appear in anything that came out of that that was different than the house hearing? >> guest: i think the main take away was that you don't want to mess with al franken because he was incredibly upset with nbc, he's a former nbc employee on saturday night live

for 20 years as a writer or performer, and he really put the women on both brian roberts and jeff zucker during the hearing. boast of the issues you're talking about program access also program carriage which is a different thing, these things get technical and he got into it in argument with brian roberts training hearing about some of the issues, it was fun to watch but i think the bottom line here is one of the things that comcast is running up against across the board is as part of anything they've said they will do in this deal is a we will abide by the law and trust us and the public best interest. the problem is a lot of people don't trust them. >> host: joelle tessler, was a significant that the senate hearing was held by the judiciary antitrust subcommittee of the house hearing was held by the telecommunications subcommittee? >> guest: well, i have a feeling that this going to