what i was referring to is nbc universal and their businesses, which for the most part i don't directly touch. >> the investment that you are making into your ownership, are you expecting that to be partially repaid by users who are comcast users? and i'm from a state that doesn't have comcast. i will get into that but are you expecting a rate of return from those customers both the users of comcast and commercial users who put product in? and if so how much of that? >> i think more than half or some percentage of nbc cable and nbc broadcast is an advertising supported business. so a large part of the answer is advertising. a second part of the answer

would be improved quality. so you get higher ratings, then you get higher advertising not just from a healthier market but a better product. >> four to three to two to one? >> correct. then there are subscription fees that the cable channels have and traditionally nbc has been a fairly priced, widely distributed group of cable channels like usa, sci-fi and we are counting on sort of business as usual in that regard. >> i'm new to this process and i'm watching my time. the questions come up on union contracts or there has been commentary that comcast hasn't been as fair -- and i'm not saying those are my words, i'm just repeating what i have heard. so here is the question. how many union -- how many of of your employees are currently under union contracts in comcast, any form of union? >> we have two basic businesses. in the cable business it is

around 2% to 3%. that is pretty normal for cable operators. and you will find that that is not an outlier in my opinion. in our programming business it is north of 10% to 14%. maybe in some of our business that is a little bit hire. in the regional sports business. which is also, i think, inside the new orleaorms. we have tried to stress that we intend to honor and support all of the agreements with the guilds and trades that nbc has. it is a very different business than cable distribution. but we are very proud of what we have built at comcast with 100,000 employees and a company a lot of people would like to work for and i'm proud of that. >> let me one quick question then i will submit the rest for the record because of time. do you agree that conditions could potentially be placed on

you during the agreement and why not just not wait for congress because if you wait for congress to deal on access rules i may be dead and gone by then. but why not just work it out, stphrt it into the conditions and move forward in >> in some ways i think we have suggested that. on day one there were certain areas we acted how we compete and invest and how we feel with localism and free over the air broadcast and some of the union issues. in all of those issues we made upfront commitments. one commitment we clarified that we are prepared to talk to the f.c.c. and make binding is if the court case were to overturn some of the access conditions. they tended to be focused on exclusivity and some of the issues like sunday ticket or nascar. >> let me end there. my time is up.

mr. wells, i have questions and i will submit them to you for the record. but again on condition because the chairman asked an interesting question and that let's assume -- here is the question. would you allow and work to make sure the conditions are in whatever agreement without the argument that, well, congress will do it later? in other words forget about what we are going to do because if you wait you will never do this transaction. >> the conditions that we have suck and we are prepared to further talk about and try to clarify would not premise themselves on congress. >> thank you, mr. chairman. >> thank you, mr. chairman. professor yoo, my memory of antitrust analysis is that one of the first things you talk about is the market. what is the market, relevant market hear in determining whether or not this transaction meets antitrust standards?

>> i appreciate focusing on this. we have heard many dire warnings, little discussion of law and facts or markets. there's basically two markets here. one is the market for distributing video programming locally. typically done by a local broadcast television station or cable operator. the second is the market for cable for television networks, broadcast or cable networks. in general these are considered to be completely independent markets. there is a well established framework by the merger guidelines for annualizing these mergers and setting up concentration levels. it measures through the an index called h.h.i. it sets up benchmarks for each kind of merger. some mergers will require strict scrutiny, some get a light look and some are approved without any extensive analysis. what is most interesting is when you define the markets properly by looking at the facts it falls into the category of things that

should be approved without significant scrutiny at all. in fact, if you look at actual enforcement policy over the decade of about 1996 to 2005 spanning both democratic and republican administrations, no antitrust authority has ever challenged a merger at the low levels of concentration that are here. i think that there are real concerns that people have and mergers do change if disruptive to a lot of people and going to create defend patterns. but that is an inevitable part of the business. >> when you say relatively low levels of concentrations, i'm looking at your testimony on pages 14 and 15 and you say nbc universal has 8.8% share of the market which makes them fourth placed. the combined company 12.1%, fourth place among cable programming companies. so it is also my sense these markets are changing so quickly. the way we get programming we are getting it on our

blackberry, we are getting it on the internet. who knows what the next thing will be. it seems like a very dynamic change. but even in the marketplace as it is now it seems like it is a pretty low concentration. >> absolutely. and if you look at the trends it is becoming less concentrated with every year. the traditional models are changing. in a real sense there is an archaic aspect to this. if you look at how our kids access video it bears no re s l resemblance to the markets we are talking about now and the parties that are merging have .7% of the market and .3% of the market and theç merger will yid an entity of 1%. we have heard about hulu which is an independentlyç managed a financed, even it as important s has 4% of the market. so we are talking about a very different landscapeç and very small players. >> mr. roberts, one thing that occurred to me as youç acquire

more content i guess one concern would be whether or not you would seek to charge more for other content to come on your cable network or whether you would give preferential pricing to yours so it would be anticompetitive. >> i heard the concern and it has been referenced a little bit. first of all, if that was such an achievable objective, why did newscorp get out of directtv and time warner spin off time-warner cable? because it is such a competitive market that i don't think that is really the motivation nor do i think that is truly viable. and there are very visible industries and program access opportunities if that were one's behavior. what is our motivation is to try to make these channels better, more relevant, invest in them,

be more focused on them than their current situation, and that we think they are good businesses as you described as the next generation wants them on more platforms. i don't know how more we can state it that that is what our goal is. and i think if we do all of that we will have a successful deal here. >> can you speak to what is going to happen to employees of nbc and specifically as you may expect being a senator from florida i'm concerned about nbc universal, her headquartered. the theme park operation is headquartered there. i expect you are going to commit there is no plans to move that to philadelphia. >> people would love to be in the snow we have had all winter and here in washington. yes, we are excited about other businesses that we haven't talked about at all today. nbc universal and what have you and the investment made in the theme parks with the harry pot

other. that is, in my opinion, undertalked about is g.e. decided to sell and in all likelihood it was going to sell to somebody and most of those somebodies that i can see would have duplicative businesses and there would have been job reductions. comcast doesn't own a theme park, news channel or broadcast, film studio and doesn't own many of those cable types of news channels. so we don't anticipate think reductions and movements and all the disruption to people's lives at this really sensitive time in the economy. and that may not be the sole determining factor but a reality that g.e. had chosen to sell and if they sold to somebody with more synergy wall street would have liked it, washington perhaps would have more dislike. >> if you would like to move the general headquarters to florida we would welcome that. thank you, mr. chairman.

>> speaking of headquarters, i think members of the panel might be interested to know that this giant of comcast actually had its beginnings in my hometown of tupelo, mississippi. and mr. roberts' father, mr. ralph roberts, is right behind him. if you would wave to the audience, mr. roberts. he is not from mississippi but he close the city of tupelo in 1963 to start american cable syste systems, which is now grown into comcast. so, i did forth want this opportunity to pass without giving the members that little history lesson and give our welcome on behalf of the committee to mr. ralph roberts.

but, to our witness, mr mr. roberts, what do i tell my fol folks, regardless of where they get their tv, give me some specific benefits they are going to get. you are going to get this, this and this that you haven't had and it is going to be better if this is approved? >> first of all, thank you on behalf of the roberts family. somehow he gets the nice part and i get the tough questions. but i have been living with that for a long time. laugh laugh >> by the way, it occurs to me you may want to hayesen to add that you -- hasten to add that you really do love philadelphia. >> but i have been to tupelo and we are very proud of the mississippi heritage in the company. >> we are proud of it. >> right off the bat, i will tell you i hope we are going to make better programs and invest in localism because we are a

local company. and whether there is the tv station or cable station, there's been a trend to cut back on local public affairs programming, local news programming. take something like on demand. we, today, we have 14 billion on demand shows that have been downloaded on comcast systems the last several years, more than anybody else. that is as many as itunes, more than itunes, across the whole united states. these are half hour approximately on average. that is a technology we sort of helped invent. the number one criticism i get when i talk to customers about on demand is why can't i get more movies, why can't i get more tv shows on demand? well, we have 4,000 movies in a library and 3,000 television shows in a library t. i hope we can hasten consumer access to older content, newer content on support distribution platforms much we are at heart a technology company that is embracing change. and i think both from the

product itself side and from the availability and changing nature of how consumers at different ages want to consume, that is one of the goals i have. so more on demand content and more content available over the internet, not as has been described, less content available over the internet. that is not in keeping with what our goal would be for this transaction. >> ok. so, more local programming, quicker access to on demand and more content over the intent. mr. cooper, or mrs. çabdoulah, would either of you care to challenge that? >> well, the economic interest of comcast is to maximize its profit. -- >> you don't object to that? >> no. but theç antitrust laws believ competition is the way to

accomplish that. here is an example of the math mr. roberts might discover. if he can deny mrs. abdoulah to must-have regional sports and he shrunk the audience butç under mined her right to steal eyeballs from him, he makes more money that way. he uses his control of access to this programmingç to reduce competition in the local distribution of video programming and increases his prof profit. in all of the numbers you heard about market shares, one number was left out. in almost every market where he said this is a local business. of the multichannel video market he had at least a 50% market share. in many markets he might have a 60% market share. that is local market power. that is the one number youç didn't hear at all in this ocean of numbers. that is the heart of his market power. that gives him the ability,ç tt

is the business he is protecting. that is how he exercises market power there. now,i]óo youç can take that arithspáicç and apply it acror the board withxdççvç nbc pro he is guaranteed them accessç 24%q of the market because now e owns them. >>ç mrs. abdoulah wants to jum in and we only have a minute obertsçç would have aççç rebuttal. ,>ç againç i'm not here to de whether it should be approved. if andçvççç when itç is aps critical that it has conditions for the very reasons mr. cooper was saying. the numbers here, you can talk national numbers all you want. the concern competitively is the local level. >> you are reiterating your previous points. what i was asking is are my folks going to get more local shows, more access to on demand and more content over the internet? >> well, if they are from comcast, yes.

if they are from a competitor, it depends whether they can negotiate for that content at a reasonable price at reasonable carriage and reasonable terms and conditions. and if they are not reasonable, right now the program access rules do not give us clear opportunity to resolve them. >> can we ask mr. roberts to give a 30-second rebuttal? >> i can do it in less than 30 because i think you are talking around all the issues and i think there will be a thorough review and the program access, the f.c.c. said maybe they can do reform. nbc content today is not subject to those program access rules. so, by combining with comcast there is an additional governmental review process for any dealings on that content with mrs. abdoulah's company that doesn't exist if g.e. kept the business. >> thank you, purchase. >> senator mcca

>> i want to make sure, mr. roberts there is nothing wrong with your company making a profit. obviously your job is to make sure that your company makes a profit. you would be in big trouble if your company wasn't making a profit. so i assume you want to have the merger to make more money. >> i stated earlier we hope to have a positive return on the investment but as the chairman pointed out not all mergers have worked for shareholders. others like a.o.l. and time warner or like directtv and newscorp -- >> you keep using those as examples but i assume you are going forward because you believe you are going to make money. >> i hope we have made a good deal. >> you figured out something that time warner and a.o.l. a didn't figure out or time warner

and newscorp didn't figure out because you plan on making money on this deal. >> we hope the economy, perhaps the biggest difference is the moment in time. a.o.l. was at the peak of the internet bubble and we hope we are at the boom of the u.s. economy. >> let's assume you make money on it. let's assume that this is a risk which is part of the fabric of american business and great part of the fabric of american business, one we should all relish. all of us in this room are risk takers or we wouldn't be here. there is a lot of risk coming to this miss, too. let's assume your risk is a solid risk and you make great money. i assume you have no problem with other consolidations that are similar to this. let me ask you a hypothetical question. if a year from now or two years from now and you have been very successful at this, i assume you would have no problem with time warner buying abc.

>> uh, if i might, which time warner? time warner or time-warner cable? >> your competitor, time-warner cable? >> i would have no problem. >> and you would have no problem with dish buying cbs? >> again, only comment i would make i don't think so but the only comment i would make is in the world of hypotheticals what are the facts at that time. i want to caveat that answer. but i think with the market the way i see it, it is more competitive than ever, there are new technologies and we compete and i think for the most part what you are positing i don't think that is where the market will go by the way because the trend has been the other way. >> but you are bucking that trend and you wouldn't be doing it if you didn't think there was a money-making opportunity there. >> the c.e.o.'s of the companies you referenced have publicly said they are not sure they like the trend we are on. >> they have a way of coming and going. >> they both have been there a long time but i understand your point. well made. >> i guess what i'm saying is we

are going down a road with this and i want to make sure that you are perfectly fine with everybody saying come on, everybody, follow me, let's do the same thing. >> you know, if we are successful as i hope we are and people want to follow that road, under the right circumstances, depending on what the the conditions are and what the facts are at the time, one of the points i would like a chance to make is i'm not sure that is the trend. but if you ask me hypothetically i don't think we own any media voices in the market. so, different hypotheticals have different realities. we don't happen to own a news exam or broadcast network or -- channel or broadcast network or movie studio or theme park. >> do you charge,over, a lower rate for your regional sports network than you charge other operators? >> we are in 10 different cities, hundreds of different agreements. we have more scale in some

markets than some distributors. so, i don't know off the top of my head every deal. every rate. i think for the most part there is a transparent process. >> if you would get us that information that would be helpful to know. >> some of those agreements are -- i will have our team follow up with the best they can given or confidentiality agreements. but week try to summarize or generalize. >> it is important we get a handle on whether or notç you are, ifhere is a price premium to others for what you own. because continuing is a -- i think it is a good indicator of what may come in the future. >> i would point out the regional sports business, the question you specifically asked, are subject to a condition we had on a previous deal that anyone who is not happy can complain to the f.c.c. and go through a process. >> that is good. finally, i know there's beenip lotç of talk about program accs

rules and how they are going to be protective. here is my question about that. this is pointed but that is kind of my job here. if you are relying on the program access rules to reassure people that there won't be problems associated with this, isn't it true you are in court challenging those very program access rules as we speak in >> well, let me say i said early in the testimony previous to this transaction there was a challenge made by i think it was cablevision that we joined in on the exclusivity, primarily the exclusivity provision. because those rules were written 20 years ago. the last 20 years things lick sunday ticket and -- like sunday ticket and nascar are exclusively on our competitor direct tv, dish network has something like 50 or 60 or 80 ethic channels that are exclusive. so, the question was should the

rules apply to the new platforms that are now way more successful than they were 20 years agoç wn they didn't exist or should they sunset. rule sunset. but we have volunteered is that even if you were to win that case, we would want the program access rules to apply to us, and we are prepared to talk to the fcc about how to do that as part of this review. >> i think the committee should take a look at those program access rules and see if there is something we could be helpful on in making sure they are tight enough and broad enough, but is anything that is 20 years old in this current market obviously has huge issues without a -- with applicability today. it is something we might want to take a look at. >> while i was not in the room, i was able to listen to your

testimony. it was very helpful. mr. roberts, in the promotion of the comcast-nbc merger, you committed to expanding local broadcast news and public interest programs. new jersey would make it the fourth largest media market in the country. it lacks its own market. the only commercial high power station in new jersey, wwor, has not adequately served the people in new jersey. what ways might a combined comcast and nbc expand, and give us some assurance that our local coverage will be a major thing as a result of this?

>> i am not sure i can completely change the broadcast business the way it has historically operated, so i do not want to create a false answer. nbc universal has 30,000 creative folks that comcast today does not have. what we have committed to is trying to figure a way to take some of the news talent, news gathering, rather than cut it back, try to find ways to have more air time and more on demand where diverse programming and public affairs programming -- so we will have more expertise in the company then if we do not do this deal. we are not going the other direction. we have many cable systems in new jersey that now will have the resources of nbc in new york

and philadelphia. >> if we can be a little more specific, with the multiple channels, might comcast and nbc seriously consider devoting a broadcast channel exclusively to the issues and needs of the people in new jersey, as opposed to us reaching to new york or philadelphia to get it? >> is something we should look at. there is an opportunity and the talent in the company looking to do more. we have new jersey -- i just do not know the answer as to why it has not happened before. >> but you have a significant increase in the number of channels that are available?

i am asking for some degree of comfort to be offered in terms of making sure that nine new and people -- 9 million people, the ninth large stake in the country, can get the intention it rightfully -- get the attention it rightfully deserves. >> i would like to talk to nbc about that and get back with you. i would like to give up all response to that. it sounds like a market that is underserved, and i do not know what would not want to focus on it. i am saying -- >> what about new technologies? i had a chance to meet with your colleagues and your senior partner yesterday's, and we discussed -- i thought ralph was

the senior partner. in talking about the advent of new technologies, 3 d and so forth, what might this merger produced by way of acceleration to these new technologies and availability? what kind of pricing might be out there for people who want to use that >> i think we are seeing an extraordinary moment right now withç technology and change. it is generational in part. if you look at the two largest movies in recent memory, one of which of all time, "avatar" and now disney's latest movie with johnny depp, "alice in wonderland" incredible response by the consumer to 3-d. you are seeing the next couple

of weeks or right now several television set manufacturers announced they are going to put 3-d into çt's. that is a -- tv's. that is a great new consumer interns. i don't believe people want to watch with glasses eight hours a day. but for events and special high, well produced content, it can be a whole new business. by the way, i think if you speed up your internet connections you areç going to be able to enjoy 3-d over the internet and we will do some demonstrations of that in the near future. i think that is what gets me most energy gilesed by this -- energized by this transaction. certainly on a national basis and can you take thisç content- and, by the way, export it around the world and comcast transforms ourselves from a local company to a national and international company and uses our technology roots and historical roots and tries to

now say can we put more energy and aggressiveness around this than, frankly, g. efpe. can or others are doing in the space? i don't know that it will all be perfect or simple but that is what motivates me. >> we had, as everyone is aware, a recent breakdown in negotiations between abc tv and cablevision. suggest that s.e.c's rules governing such negotiation may no longer -- and professor yoo i would like your comment -- sufficient to protect consumers. might you suggest a change in the rules for re transmissitran consent and negotiations so the consumers are not constantly caught in the middle? this was a series of embarrassmen embarrassments, a feeling that too much muscle was being exercised over the viewing

audience and it was disturbing. and we jumped in, other people jumped in, i was not the sole lifeguard in this. but last-minute change was induced. is there something that you might suggest, professor yoo? >> can i think of something that will make it so every bargain goes to completion successfully when you have two people bargaining over money, the answer is no. there are times in every bargain where one has to walk away. it happens in union bargaining. if two sides have a different sense of value there is going to be deadlock. and if we are going to have a system around arm's length bargaining that will be the case. can we do things to help the process, start things earlier. mrs. abdoulah raised a number of concerns. i think they are all valid. i'm not opposed to merger conditions. if i misspoke i apologize to the committee. i think if a merger raises an issue it is entirely appropriate to impose çconditions.

what i'm concerned about is to take a general problem that affects the entire industry and to put that into a merger review process where the parties will doç anything to consummate the merge are and agree to everything gives short shrift to the issues. network neutrality has beenç mentioned. we have had an open proceeding and comments are due april 8. we will have a proceeding that will consider every aspect. we should allow it to run its course because that is how we make good policy subject to judicial view and public participation. the danger is if we do it ad hoc we have a 21% partñr of the mart in high speed data and to do it piecemeal through merger review process hurts the process and leads to bad policy. >> and i'm going to agree with you as you have reviewed this. the question is, who is in charge? are the people who use tv as the

commodity in their lives today, you know that certainly, mr. roberts, people consider that tv is rightfully an opportunity for them to learn and amuse all of things that occupy time. it is a wonderful addition to life for people who are in their later years, can see communications from real-live situations. so, the question is, who is the determination to be made by? and i'm notç suggesting that w impose rules there except that i think there ought to be some sense of loyalty to the viewing public that says, ok, if you have to suspend or continue your negotiations but don't grab a millions of people and say we are going to keep you from seeing something that is really important to them. >> that is a great question, who is in charge. the programers who provide the

content have all the leverage. i can tell you a quick story. we were negotiating with a programmer who had a suite of services. we took off one of the services because it wasn't viewed, we never wanted it in the first place. two weeks later not one customer complaint. i get a call saying if we don't put it back on their other service which was highly viewed would be taken off by midnight. now, it wasn't a comcast-nbc programmer that i'm talking about. but it is that kind of leverage they have on operators who are representing consumers. that was not going to be good for our consumers and i had very little leverage because i could go and file a complaint but even while i filed the complaint they can pull the network. >> mr. chairman -- will the record, i assume will be kept open for a bit of time. >> it will. >> i thanks for your indulge

generals with my over-- indulge generals for my overrun. there are so many questions here. the thing had just described to this committee goes on all the time, and we hear about it all the time. the provider says we have for channels here, and you have to take all four of them, despite the fact you do not want all four. if you do not take two of them, they will yank the most popular. there is a lot of leverage, and that is part of what we are talking about. it is going to have the leverage, and how will it affect what the consumer gets in the end? professor yoo, you have at least resolve one question. you seem to suggest this is a slam-dunk, yes or no, and no

conditions. there is no problem with conditions, right? let me just tell you that the at&t bell south related a condition of net neutrality, which i strongly support. it was very constructive in leading us to war progress -- to more progress. that is not complete, thanks to a lot of folks who are fighting it tooth and nail. i think things like network neutrality or internet freedom are really important, and i would not one to have big interests decide to get married without a requirement. mr. whitaker, -- the waters belong to me and i do not want to will using the wires. that set off with the basic

issue is with respect to internet freedom and gatekeepers and so forth. having said all that, you have no problem with conditions. i do not have a problem with conditions. if this is approved, in the future there will be conditions. >> i have no problem with conditions that are implicated by the m merger. if we use the merger review to expand beyond the scope of what is indicated by the merger, i think that should go back to normal regulatory process. if you read the at&t bell south or, it says that network neutrality is not required. they have voluntarily offered to do it, and we accept their voluntary condition as in the public interest. it has created a strange policy posture for the fcc. >> the interesting thing is that i actually agree with professor

yoo about how we ought to deal with the fundamental problems. mr. roberts said these are fundamental problems in the industry. i suggest the way to handle this is to insist that the fcc and the other relevant agencies do the industrywide rulemaking first so that we have the basic structure of protection that we need, and then consider whether because of this murder there are additional things that need to be done. -- because of this merger there are additional things that need to be done. >> the fact is, some of the biggest interest in all their time trying to prevent action being taken industrywide. i understand your point. >> independent programming, it

is very important, and it is diminished and continues to be diminished. how do you see as making progress on this? it is doing the investigation? the gao is doing the investigation at my request on independent programming. i would like to understand what is being proposed with respect to this merger, however it can affect independent programming and the quantity of it. >> there are two separate issues. nbc has been very aggressive in attempting internally to produce things for themselves, and i think anything that can be done in what is voluntary to compel more independent programming would be terrific. in the cable world, they control

a great deal of it in there is very little that is going on that they are not actually that has changed in a way that made it difficult for independent producers to bring things to the marketplace. >> why is that the case? >> why has it changed? >> it has changed historically because the companies have used the leverage of it's going to go on the air or not to insist it be produced through their own entity or insist that it be a co-production in some fashion before it goes on the air. there are numerous examples of that that could be brought forward. again, this is why we've tremendous concerns about the net neutrality act, because we believe independent producers may get a leg up if they have another distribution outlet which away might be able to use for people to produce independently assuming we won't have the same kinds of financial restrictions to getting that material on particularly since

it will require greater speed with which to put on that video. >> mr. roberts, for those of us who believe more independent programming rather than dramatically less is good for the country, what can we take from this, from the recent history and from your proposal to get larger through this acquisition? >> first of all, i would put it in the context the previous senator mentioned, let's go back in time we there were three tv channels and today there are hundreds. so where i think comcast has helped totally open up choice as have other cable companies, i think many independent producers exist and many have been, sold their company, chosen to colonel date into -- consolidate into other providers. i think we should separate some of these. we have never made broadcast television programming. so, whatever nbc has done to be in fourth place we hope we can do better in the future. so i come with an open mooned on

how to do better. i don't know that i would support a government quota that would apply to us that x percentage should be this and y percentage should be that and it doesn't apply to anybody else. so, there are other rules in the past that seem to affect this ar area. and if there should be an industry review i'm sure nbc will have a point of view on that matter but i don't think this merger changes thatç tren or that existence. if anything, we come with an open mind not to just want to make it ourselves. our history with our comcast networks is not to do that. a substantial percentage of our program something from independent producers. six outç of seven cable channe we carry after the merger we will have no financial interest it and we have to compete with other carriers in the programs they want to carry. so, whatever has been happening inside this industry we come and want to try to see how to get the best programming possible in the future.

>> you will inherit through this acquisition, i believe, 10 nbc television stations. >> yes. >> and 17 telemundo stations. >> yes. >> are there other communities in which you would have two stations and also in which you are the dominant cable provider? and is that an issue, or should it be an issue? >> there are market where is both telemundo and nbc there are and comcast is the cable operator. i don't believe so because one of the conditions we have voluntarily started with was retransmission consent for those broadcast stations that would have program access apply to it where heretofore program access was never applied to retransmission. >> mrs. abdoulah. >> applying a meaningless rule to something is still meaningless. and it is an issue. in illinois we would negotiate for the regional sports network. we have the nbc network and we

have telemundo. so, now we are going to be, instead of negotiating with two different providers, we negotiate with one for all of the suite of those services and that is intense leverage that they are going to have on us today. increasing from today. >> i'm going to call on senator cantwell. let me say that i think this is a significant issue. we should think through it careful carefully, understand the consequences, pro and con, and make judgments. if it is approved, it would have to be approved with the conditions, in my judgment. but it is not for us, it is for the two regulatory agencies and my hope is from this hearing they will take a good look at this and understand theç consequences. i think there are two different views here. one is at what level are you talking about competition, local level and national level. and these are always difficult

and interesting issues. as i said, my background on the issue of media concentration and media ownership rules at the f.c.c. have caused me to have a substantial amount of of concern about concentration. on the other hand, i don't think that every, in in every circumstance, big is bad and mall is beautiful. i think that there are circumstances where concentration can provide benefits to consumers. but i will tell you something. i think concentration and leverage has to be tempered with rules and regulations and conditio conditions. we have seen many examples where they were not tempered in such a way and it turned out much, much different than was suggested. mr. roberts you mr. wells, dr. cooper, mrs. abdoulah and professor yoo, have spent almost three hours with this committee and answered all of the questions. i say to all five of you we

appreciate it. i will call on senator cannot wefpl and ask -- cannot wefpl and ask him would you -- cannot wefpl and ask him would you finish it. i have to be at the capitol. >> thank you. >> i thank all of the witnesses. >> thank you, mr. chairman. and i want to recognize your long leadership in media consolidation issues. adership in media consolidation issues and the importance of that. we will miss the voice at the end of this congress, which has been critically important. thank you for your leadership. i only have a couple of questions. i wanted to ask, mr. roberts, one of the reasons the people that cable rates are going up, basic services increasing to

122% over four years. one reason that people think that this growth in cable rates has been the right to broadcast sports programming. a number of my washington state broadcasters have expressed the concern -- at the crux of this is the rabbit year world of advertising eyeball content as a business model. i am sure that some people are wishing we could go back because of the cost. networks are worried that they're going to be eventually priced out of major sporting events because their business model and an ability to cost -- pass those costs on is going to be challenged. some people have said that in the distant future we will be

watching the super bowl on cable, meaning we will be paying for it as opposed to having an advertising model that gives access to a broader number of people. do you share those concerns? >> thank you, nor cantwell -- senator cantwell. i think there are some industry trends going on, two examples, the b.c.s. game is going from fox to espn in the future and "monday night football" went from abc to espn. so, i don't think this merger actually changes that potential in a way. we wouldn't be buying nbc if we didn't want to find ways to make nbc vibrant, valuable, great, and sort of back to some of the glory of what it did in the past and hopefully what it can do in

the future. so, i think some of the questions that get raised by that are retransmission consent, you know, that we have been talking about today on the pa l panel. and i think other industry and i think we can now perhaps play a constructive role, will be basically 80% capable operator, 20% of content company after the transaction. so, in a sense we are going to look at it from both sides and say are there creative and good for consumer solutions we can propose that apply to the whole industry, not just to one company, that address some of the things that i think are very real that you raised. >> dr. cooper, do you worry that we are going to have to pay for the super bowl in the future in >> the only reason that the cable operators are able to pass through the outrageous cost for sports programming is because they force skaorpls to buy bundles. they deny consumers per channel

choice. one study done of those channels was that three-quarters of the american people wouldn't pay the price that they are being ç charged. so, the answer is that the market power they haveç at the local level and the changed consents -- nbc has an incentive to be on every tv set today. once they are owned by comcast they have an incentive -- they have a different incentive because now they are on 24% of the nation's tv sets. so, all of their incentives will chan change. their willingness toç maximize profits will change. tv everywhere is a perfect example of tying the cable fee to another service. that is another bundle. so, that is the way we must address this. there is a real incentive here to extract from consumers what is called surplus by tying those products together. they will have that incentive. so it is a very real concern.

>> mrs. abdoulah. >> from our perspective, the accountant providers have such leverage during negotiation, not only do they make sure we take the product that they want us to take and not necessarily what consumers want or want to pay for, but also how we carry it. for a long time i have wished that our programming agreements allowed us to tier the services appropriately so that when i got customer complaints i have a direct e-mail and a direct 800 number for customers to call me directly and they will say why do i have to pay for this sports programming? why is my bill continuing to go up? i can't tier that. because i'm not allowed to. i would love to be able to offer services in a way if we have sports fanatics they can buy it and pay extra. but that is not how the program agreements are currently structured. >> i have one more question to ask mr. roberts about customer

service. when i think of vertical integration, and i think this whole area we have -- we have some barriers to entry here and we have challenges even for the consumers in switching from one competitor to another. it isn't as easy as people might think to just do that and if aware only talking about two or three or we will continue to see integration, to me customer service is very important. and when you think about the amount of money that comcast has been able to make, how much are you pouring into increased quality an customer service? >> well, let me first give a bad statistic, which is we have lost 1.2 million cable customers in the last couple of years. so, there is real competition that is hurting us and some of that is self-inflicted with mistakes we have made on

customer service. so i have made it a top priority for our company to improve customer service and the customer experience. because it's not just when you call, it is how well the entire experience is defined. >> what grade would you give you? >> i think we have improved. i would say we were -- i don't know. this is -- we spent over $2 billion in the last two years more to improve the customer experien experience. and the number one thing that we are rolling out and we rolled out in the last six months all across the nation is a guarantee to our customers if we mess up wefest fess up. so if we are late for an appnyntment, it is on us. we will pay your bill. we will give you free premium service. we will pay $25. >> you will get free premium service? >> for that month. for a couple of months.

different markets have different specifics. but up to if we are late here is $25. here is a free install. here is a guarantee. if you don't like the product, give it back at the end of the first month. the things you have seen in other businesses that get back up their claims is now something we have across the entire footprint. we are upgrade being t gradgrad the internet. but we know it has to work and even if we have more choices than ever before the, if it breaks and the cable goes out sometimes it is not our fault you don't want to hear that. you want to know how fast am i back up and can you text me a message that the cable is out and you are on it and you know about it. so, we are building diagnostics into the system so we know there is a problem, maybe you are not home watching and we are on it before you call us. all sorts of improvements along those nature because of

competition. because it is the right thing to do because it is good business and i think we have made progress. i would say the grade is improving but it is still not perfect. >> i think that it is a far from perfect and really the issue from my perspective is that if you -- you are taking this revenue that you are making off the consumer base and trying to consolidate in a more vertical way which will leave the market with less choice. it would be one thing if the consumer experience was continuing with great customer service. so i wouldç encourage you to g back and look at your business from that perspective and i think that there is some interesting things out there but saying to people are going toç come within a four-hour window and not showing up and saying here is $20 hardly basically helps the consumer. and when they have to spend the time to change to another service, so we are making this vertical integration that makes it more challenging and we want to see the consumer definitely has choice, has competition, but

is also going to have a good experience and can easily move toward other competitors if that experience isn't delivered. >> if i might, to that point i agree with you, and just to demonstrate a couple of points of progress, we had 2.2 million fewer customer reported problems the last quarter, or in the last month from a year prior. we went from 84% on time by putting the guarantee in place, our employees, even if it doesn't completely compensate the consumer to your point, our system -- nobody wants to report that they spent that money. so we have gotten to 95% on time from 87% just by putting that insurance in place and that guarantee am place. so, there is momentum in this direction. i take your constructive points

that this should be the main focus of what with we have to do well. we have just recruited a new head of comcast cable and this is the number one thing in recruiting him day suggested we focus on, which is continually improving the customer experience. >> thank you. i want to thank all the panelists. i know we will leave the record open two weeks and if you can respond to questions from members and thank you for your time today. i'm sure this will be a continued discussion as you can see from my colleagues because we will be following it closely. the hearing is adjourned. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] . 123450no carrierringconnect 1200

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