tea party convention continues tonight with sarah palin's keynote address. >> this week on "the communicators," an analysis of congressional hearings on the proposed merger of comcast and nbc universal. our guests are joelle tessler and amy schatz of "the wall street journal." >> this week, the comcast merger proposal was the focus of two hearings. that is our focus this week on "book t"the communicators. join me our amy schatz and an

joelle tessler." >> i think it is likely to be approved, but probably with conditions. the democrats raised a lot of conditions. one of the biggest ones is what will happen to programming that comcast will acquire three this combination, because right now, comcast owns some cable channels but is primarily a distribution company, whereas in b.c. is a media company and that owned a lot of must have programming. the concern is that comcast will put a stranglehold on that programming and basically put

competitors at a disadvantage. satellite companies, phone companies that are providing a wheel services -- providing video services. that is likely to be one of the key issues that gets addressed. >> amy schatz, did this right down the hearing along partisan lines? >> democrats mostly racketeering. a few republicans showed up -- democrats mostly were at the hearing. none of the lawmakers said that the deal should not be approved. they were talking about what kind of conditions he should impose on the deal so that consumers are competitors are not harmed art so that comcast

nbc would not have too much power. congress does not have to approve this deal, but if congress is upset about it, they can put a lot of pressure on the justice department to do more or try to solve it or kill it altogether. i thought that was an interesting part, but it did mostly break out along party lines. democrats were saying it could lead to higher prices for consumers and could hurt comcast competitors as they try to get programming or read transmission fees from comcast. >> two of the lawmakers who did show up, henry waxman and the ranking member of the telecommutes cetaceans -- telecommunications subcommittee and exchange regarding the proposed merger. >> comcast is the nation's largest video programming

distributor, and nbc is the nation's fourth largest media and entertainment company. nevertheless, there is little to suggest that the comcast-nbcu murder would threaten the media -- merger would threaten the media industry. since nbcu and comcast do not compete in most segments of the market, this deal will not bring about consolidation. comcast has interests in only five wholly owned and six partially owned national cable networks. together, these networks only represent about 3% of national cable network advertising an affiliate's revenue. when the proposed combination of comcast and nbc was announced last year, i said that this transaction had the potential to

shape and reshape the media marketplace and raise fundamental questions regarding diversity, competition, and the future of the production and distribution of video content. i urged the fcc and the part of justice to assess rigorously what -- whether this transaction was in the public interest. two months have passed since this transaction was announced, and after additional review, i am not even more certain that this new joint venture, if approved, could trigger dramatic changes in the way consumers access video programming and the way independent programmers distribute their work and also in the way all video distributors compete for customers. >> joelle tessler, what did you hear in that exchange? >> what kind of accommodation is

this, and what type of antitrust issues does it raise? the point he was making is that these companies operate as different businesses. they do not overlap. comcast is primarily a distribution company. they provide cable services and broadband connections to the internet, whereas nbc is a media company. essentially they are different businesses. that is why republicans feel this is not raise traditional concerns and the deal should go for without conditions. the concern is that what you have is a vertical integration. you have a company that already owns the pipes that go into people's homes that deliver content, or will now on the content itself. it is about whether comcast will

use their hold over the must have programming that nbc will bring it to the competitors at a disadvantage. it raises a number of issues. one is the program access question, but also, will contact -- will comcast allow more independent networks on its own cable system? that is one of the issues that will be at the heart of the review. >> one of the other interesting issues that chairman waxman brought up was the issue about online video and what kind of market power comcast will have moving forward. comcast is really a distribution company, but they also distribute internet. there are one of the nation's largest internet providers. when you combine that with content and partial ownership of

hulu, it adds a whole different issue. that was one of the major focuses of both of the hearings. they were asking what kind of market power is comcast going to have on the online video field, and how will it impact local station owners and other cable providers in the future? >> another video we have was the house subcommittee chair rick bowsher of virginia. he talked about on-line programming, and here's what he had to say. >> mr. zucker, ,hulu blogs users to the -- block users?

>>boxy was illegally taking the content that long to hulu. we have many distributors of hulu content, so we did not preclude distribution deals. >> we have always said we are open to negotiations. >> and the two of you offer assurance that programs that are delivered of the air by nbc today are then available on the nbc.com website for online being will not migrate into the tv everywhere format so they would then be available only to people who have a cable subscription? can you give us that assurance? >> yes. >> just a few hours after that

exchange, boxy came out and said they do not know where jeff zucker came up with that. it is a program you can have on your pc that allows you to watch streaming video that you would normally watch on your pc and your tv. after that exchange, boxy came out with a statement saying they would love to talk to hulu about this and not have that problem. hulu's management said it was because of nbc, and they said in a statement, they would love to talk to jeff zucker about a licensing deal. it was a really interesting

exchange, and one that will keep coming up. people can watch c-span and other things online now. more people are going to watch video online. the people who control the content, how will they use their market power to prevent other companies from getting it? >> joelle tessler, anything to add to that? >> i believe that there were some difference of opinion about exactly who made the decision to block hulyu content. i believe it was nbc that pressured the management pressuredhulu to do that. at the hearing, he said it was a

decision made by hulu's management. what this gets that is that the internet -- more and more people are watching video on the internet. do they see the internet as a threat to their core cable business? it is really unclear. they say they do not. they say they actually think the internet is the thing that will span their business, and what to allow people to watch programming in any form on any type of device that they want and that will deliver to them wherever they want it. but it is a significant threat, and the question is, are they going to move programming that right now is available for free over the air, will they move it behind a paid wall and would you

have to pay for similar to the way you pay for television service to cable? >> you have no mention that congress does not have a role in saying yea or nay to this joint venture. do you see congress and individual members working to get concessions from nbc and/or comcast to sign off on this deal? >> i would imagine that they will weigh in with the companies, but i would imagine the pressure will fall more on the sec and the part of justice. they will try to influence the analysis that goes on at the agency's doing the review of the process, and that is how they could influence the outcome of the reviews and what conditions get attached. >> a lot of members of congress

accept campaign contributions from these companies. that can look bad if you have gotten a huge campaign contribution from comcast or nbc in the past. that and say these are issues they think the agency should look at, and they will send a letter or have a hearing and talk to the agency about that and try to pressure them that way. it is slightly different, but they can say you have to approve this right now because it is important for the american people. that does not look very good. >> two more members talked about who has authority to yea or nay this deal. >> there are many different issues that we will be dealing with today. i want to make it clear, i do not want the department of justice to enact legislative

policy. that is our job. i would be careful for members -- giving up our responsibilities on telecom might enacting procedures. that is where i stand. a possible nbc-universal is good for all our constituents. i hope it will facilitate the creation of more popular programming choices for all americans. american films and television shows or one of the ways we reach cultures throughout the world. i am not sure that is always a good reach of culture, and i question some of the things our consumers like to watch. i think it sometimes does not put the best focus on us as a culture. >> telecommunications

megamergers have the potential to create monopolistic titans. the department of justice will insure that this merger does not violate our antitrust laws. the fcc has a special burden. it must ensure that this merger protect the public interest. it is not just about the purchase and sale of private businesses. it involves the transfer of public property, broadcast licenses to operate on america's spectrum. just as importantly, this merger has the potential to place a chokehold on the transfer of information on the internet to consumers today and well into the future. if anything, this proposed merger demonstrates why we need a net neutrality across the board. >> i think he was talking about net neutrality when he was

bringing up his concerns about the fcc making policy through mergers. that is something republicans complained about a lot. the fcc likes to create policy, and they can do a lot with merger conditions. that is something we are seeing with the net neutrality phase. there is a pending lawsuit against the agency, and damp the democrats would like to seek some kind of net neutrality conditions put on the merger. comcast and the republicans are arguing it does not make sense to impose neutrality conditions only on comcast because it would not apply to at&t, verizon, or any other competitors of comcast.

as we go along, we will see what justice and the fcc does, but there will be pressure to get net neutrality conditions put on this thing. >> it is interesting because comcast is in the middle of this unrelated fight with the fcc over net neutrality, which is played out in court in washington. that comes from an action taken under the previous chairman. he ordered comcast to stop blocking traffic on line, a service called bit torrent. comcast said he -- it was blocking at because it was eating up all the network bandwidth and slowing down the network for everyone else. some feel they are doing it because they saw all sharing as

a way to trade video on the internet and comcast saw that as a threat to its core business. comcast challenged that order in court, and at oral arguments here in washington the judges essentially kept it out of the fcc authority to mandate net neutrality rules. that is the backdrop to what is happening now. the concern is bigger when you talk about in the context of the nbc merger. you are talking about allowing comcast -- they could favor their own content and put competing content at a disadvantage. the whole dynamic is playing out in the background here, and comcast has said they do not

want that neutrality to be decided as a condition to this merger. that has to be addressed separately. >> amy schatz, is it a merger or joint venture? what should we call it officially? >> it is a joint venture. it is not necessarily a merger, because they are talking about creating a different kind of company. comcast is buying 51% of nbc. ge will have the other 49%, at least for a few years. >> so where do we stand? comcast has submitted paperwork to the fcc. what did they submit? >> they submitted their application to the department of justice a couple of weeks ago. the recently submitted a 145-

page document where they talked about why this was of interest to the public and how does not have any competitive concerns. they still have to file formal paperwork to transfer the licenses. but the fcc has to do is agree to transfer the licenses from control of ge to comcast. >> essentially, the review at the justice department is likely to be focused on antitrust issues, and that goes back to the point of that it is a vertical merger rather than a horizontal merger. the fcc review will probably be

broader. they will look at things like if it is still in the public interest. will it promote more local programming? what about duplicity of programming? it will be broader and also look at it promotes the public interest. >> one of the test of fires at the house was connie abdoulah. here is an exchange she had with shestearns and brian roberts. >> what advantage was this -- with this company gain from withholding content from you and your customers? why would they want to do it? >> i cannot offer the same content. where does my customer go? to my competitor, to comcast.

>> mr. roberts, you might want to comment on her comment or dr. cooper's. >> first of all, the content will be made available to our competitors. in the last two years, comcast has lost about 1.5 million customers wellstone, satellite, and others have added over 7 million. the largest-two leaders are to satellite companies. there is a very competitive market. we see the value of the content growing. i agree that we will be well served to make the content available to all the players in the marketplace. i think this will ultimately lead to more innovation, more

content creation. we see it as a growing business. we will talk about the intellectual property and how to protect it. we are focused on that same issue. recognize this is a very competitive video distribution market place and this is an opportunity to participate. as the internet grows, we want to see the content available because that is where the consumer wants to beat. >> it is not just about withholding content. it is also about putting restrictions and conditions on how we offer that content. those are two things we need to consider, because that happens as well. >> is that one of the antitrust issues that the the part of justice will be looking at? >> that is one of the biggest issues that will come up.

what happens when you allow comcast, which competes with satellite and cable companies, verizon, at&t, which have their own video services. when it gives, but predict when it gives comcast control of the network and sports programming? the executive from wide open west said, how is she going to compete if she does not have access to this programming? the customers will go to her competitors. nbc and comcast are in different businesses, and they keep making that point over and over again. the point is that it raises a different set of antitrust concerns. the regulators will have to really address that to make sure that competitors can still get access to the programming they need. there are rules in place put in

place by the 1992 cable act that require cable companies to give the competing video services access to the programming that they own, to treat them the same way they treat their own network in negotiations of what they pay for access, rates and terms of carriage, and comcast has said repeatedly that they will abide by the rules. there are existing protections and there is no need for competitors to be concerned. at the same time, the rules are being challenged in court. comcast is one of the companies that have brought the challenge. there is a lot of concern among competing video providers that the rules are not that meaningful anyway. they want to see binding arbitration.

>> she was worried about still being able to get bravo and the golf channel, channels and her customers really want. if she doesn't have the channels, they will not subscribe to her service. she was also talking about it in the hearings in concept of the internet, and she was going to provide internet be of service for customers, she needs access to the online video streams from those channels, too. i am not sure the fcc rules apply to the internet close of those channels. -- the internet flows of those channels. >> there was also a senate hearing on thursday of this week

on this issue. was there anything that came out that hearing that was different than the house hearing? >> the main take away was that you do not want to mess with al franken, because he was incredibly upset. he was a former nbc employee for 20 years. it was mostly over program access, program carriage. these things get really technical, and he got into an argument with brian roberts during the hearing about some of those issues. it was fun to watch, but the bottom line is, one of the things comcast is running up against across the board is that as part of anything they said they were going to do, we will

abide by the lot and you should trust us. a lot of people do not trust them. >> joelle tessler, was it significant that it was held by the antitrust subcommittee and the other hearing was held by the house judiciary committee? >> basically, the two committee's will be paying attention to this. it will be commerce and judiciary. i have a feeling the other two committees will be holding hearings. >> so what is next in this process? >> those hearings will be the next step. it will be a long review. comcast said it will