332 AAssignmentsReaction Paper 1

4 COMCAST CORPORATION

Lee McGuigan and Victor Pickard

Comcast is the largest media company in the world.1 In the United States it commands a dominant position in multiple markets, both locally and nationally. It is a corporate media conglomerate and a shrewd political player. Despite its famously poor customer service standards and numerous public embarrassments, Comcast has managed to maintain dominance in several communication industries. It is the largest Internet service provider in the U.S., holding more than a 20% share of the national market. With over 22 million video customers, Comcast is also the largest multichannel television distributor. Only Netflix serves more video subscribers—and it pays to deliver its service through Comcast’s transmission lines. In its home city of Philadelphia, Comcast holds tremendous influence on a wide range of business and civic operations, and by all definitions is a monopolistic Internet service provider. Its national reach is equally impressive. At the end of 2014, its infrastructure passed more than 54 million homes and businesses, with operations in 39 States and the District of Columbia.2 Had it succeeded in its attempt at purchasing Time Warner Cable, Comcast would have been the only option in high-speed Internet provision for more than 80% of the households in its coverage area—nearly two-thirds of the population3—and controlled 54% of the national market in cable broadband and video.4

In this chapter, we contextualize Comcast’s market dominance. To demonstrate how Comcast has achieved and exercised its power, we focus on the company’s organization, business strategies, and political influence. Drawing from publicly available data and other documentation, we provide a political economic analysis of Comcast and the structures—policies, discourses, and lobbying operations—that enabled its ascendency.

A Brief History of Comcast’s Rise to Power

Comcast’s rise to power over the last 50 years is astonishing.5 Tracing how it evolved from its humble beginnings with the purchase of a 1,200-subscriber cable system in Tupelo, MS in 1963 to become the global giant that it is today can easily be seen as a triumphalist narrative of bold entrepreneurialism. Beginning in 1963, Comcast Corporation (then called American Cable Systems, a division of Ralph Roberts’s International Equity) acquired cable systems in Mississippi and then across the U.S.6 Its subscriber base doubled in 1986 when it acquired a portion of Westinghouse’s cable properties, and in 1988 it became the fifth largest cable company in the country, with two million customers, by purchasing half of Storer Communications.7 It absorbed close to one million subscribers in buying E.W. Scripps’s cable operations in 1995, the same year

it took full control of the lucrative QVC home shopping network, which it sold for almost $8 billion in 2003.8 It received a boost from Bill Gates in the late 1990s when he invested $1 billion in Comcast.9 In 2001, Comcast acquired systems from Adelphia and AT&T,10 and the next year it completed its acquisition of AT&T’s cable properties. With the $51 billion purchase of AT&T Broadband, Comcast doubled in size, up to 21 million customers.11

Just within the last decade, its profits have increased ninefold, up to $8.3 billion in 2014, and its stock price has quintupled since 2009. As “family companies” go, Comcast’s expanse approaches that of an empire. Reminiscent of Ma Bell in the 1960s, whose operations imitated nationhood with its flag, dignitaries, and orchestra,12 the Roberts family designates its seat of power as “Comcast Country.”

Economics

In this section we present a sketch of Comcast’s financial profile and business operations. We extract information on Comcast’s performance indicators from the company’s latest SEC filings; we introduce its business segments and describe their operations within the whole of the company; and toward the end of the section we focus on the company’s recent mergers and acquisitions to identify some of Comcast’s strategies for growing its enterprises.

Financial Data

Comcast has prospered especially over the last decade. Since 2005, its revenues trebled and its total assets increased by 54%, up to $159.3 billion. In 2014, the company reported $8.38 billion in profit on revenues of almost $69 billion (see Table 4.1). Comcast’s operating income before depreciation and amortization—its preferred metric for judging business performance—has ballooned from $7.9 billion to $22.9 billion during this timeframe.13

Comcast leads the highly concentrated industries in which it operates. Serving 22 million broadband Internet customers, it commands 20.5% of the market for Internet service provision (see Table 4.2) and accounts for 42% of Internet users accessing the Internet by cable (see Table 4.3). In its latest filings at the end of 2014, Comcast claimed more than 27 million customer relationships.14

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TABLE 4.1 Comcast—NBC/Universal, 2005–2014 (in millions)

Year Revenues Net Income Total Assets

2005 21,075 928 103,400 2006 24,966 2,533 110,405 2007 30,895 2,587 113,417 2008 34,256 2,547 113,017 2009 35,756 3,638 112,733 2010 37,937 3,635 118,534 2011 55,842 4,160 157,818 2012 62,570 6,203 164,971 2013 64,657 6,816 158,813 2014 68,775 8,380 159,339

Sources: Form 10-K, 2014, p. 45, www.sec.gov/Archives/edgar/ data/902739/000119312515068526/d817352d10k.htm#toc817352 _8; Form 10-K, 2013, p. 45, www.sec.gov/Archives/edgar/data/ 902739/000119312514047522/d666576d10k.htm; Form 10-K, 2008, p. 21 www.sec.gov/Archives/edgar/data/1166691/0001 19312509033975/d10k.htm

TABLE 4.2 U.S. Internet Service Provision by Market Share, 2014 (%)

Comcast Corporation 20.5 AT&T Inc. 18.6 Verizon Communications Inc. 18.1 CenturyLink Inc. 16.9 Time Warner Cable Inc. 12.5

Source: IBIS World, U.S. Industry Reports: Internet Service Providers, accessed January 15, 2015

In the highly concentrated pay-TV industry, the top four firms account for more than two- thirds of U.S. subscribers, and the top ten represent well over 90% of market.15 Ending 2013 with 22.6 million video service subscribers (see Table 4.4), Comcast claimed 51.9% of the cable market and approximately 26% of the entire pay-TV market.16 At the end of 2012, its monthly average revenue per video customer was $149.17 All of its offerings boast significant penetration of the U.S. market for potential consumers (see Table 4.5). Twenty-three percent of customers in the home communications market receive at least one service from Comcast, second only to AT&T (32%) which leads home phone service.18

Had it been successful in its bid to acquire Time Warner Cable, Comcast would have controlled over 30% of the pay-TV market (impelling it to divest 3.9 million subscribers to stay closer to 30%, historically the maximum allowance for horizontal concentration). Under the FCC’s newly adjusted definition of broadband (download speeds of 25 Mbps and upload speeds of 3 Mbps, up from 4 and 1 Mbps, respectively), pro forma Comcast-TWC would have controlled more than 50% of the high-speed Internet market and served 30 million managed subscribers.19

74 Lee McGuigan and Victor Pickard

TABLE 4.3 U.S. Cable Broadband Internet Subscribers, Q3 2014

Company Number of Percent of Subscribers Total (in thousands)

Comcast 21,586 42.14 Time Warner 12,073 23.57 Charter 4,956 9.67 Cablevision 2,756 5.38 Suddenlink 1,136 2.22 Mediacom 997 1.95 WOW (WideOpenWest) 730 1.43 Cable ONE 486 0.95 Other major private companies 6,505 12.70 Total 51,225 100.00

Source: www.statista.com/statistics/217348/us-broadband-internet- susbcribers-by-cable-provider/, accessed January 14, 2015

TABLE 4.4 Video Service Subscription (in millions of viewers)

Netflix 36.2 Comcast 22.6 DirecTV 20.3 Dish 14.1 Time Warner Cable 11.4 Hulu 6 AT&T U-verse 5.7 Verizon FiOS 5.3 Charter 4.4 Cox 4.3

Source: NCTA, “Industry Data,” www.ncta.com/ industry-data, accessed January 14, 2015

TABLE 4.5 Comcast Cable Communications, Customers, and Market Penetration, 2014

Service Customers Penetration (in millions) (%)

Video 22.4 40.9 Digital Video 22.2 99.4 High-Speed Internet 22.0 40.2 Voice 11.2 20.5

Source: Form 10-K, 2014, p. 3.

TABLE 4.6 Market Capitalization of Media, Technology, and Telecommunications Companies (in billions $)

Apple 477 Google 405 Verizon 194 Facebook 174 AT&T 173 Amazon 173 Walt Disney 142 Comcast 129 Fox 74 Time Warner 59 Time Warner Cable 38 DirecTV 37

Source: National Cable & Telecommunication Association, “Industry Data,” www.ncta.com/ industry-data, accessed January 14, 2015

In March of 2014, Comcast’s market capitalization of $129 billion—since then reported to be $152 billion20—was the highest among cable companies (see Table 4.6).

Corporate Structure

Comcast operates two primary businesses: Comcast Cable and NBCUniversal (NBCU). Comcast Cable manages the Cable Communications operations. NBCU comprises four business seg- ments: Cable Networks, Broadcast Television, Filmed Entertainment, and Theme Parks. The Cable Communications and NBCU segments reported revenues of $44.1 billion and $25.4 billion, respectively, in 2014 (see Table 4.7).

Through its Cable Communications segment, Comcast offers video, high-speed Internet, and voice services to residential customers (see Table 4.8). Its infrastructure passes 54.7 million homes and businesses in 39 contiguous states and the District of Columbia.21 At the end of 2014, 22.4 million, 22 million, and 11.2 million subscribed to the respective services.22 Historically, video service has accounted for over half of the revenue from residential subscribers, but an increasing percentage of earnings comes from Internet customers and from offering special business services. The Cable Communications segment also collects revenue by selling the commercial time allocated to Comcast according to its distribution agreements to local, regional, and national advertisers.23 In addition to serving as sales agents for other multichannel video providers,24 Comcast sells the use of satellite feeds to its own Cable Networks.25 Cable Communications earnings account for approximately 65% of revenue over the past three years, and some assessments figure Comcast’s profit margin on high-speed Internet service at 70–80% or more.26 Some estimates, of TWC especially, see these cable giants running Internet services at an “almost comically profitable” margin of 97%.27

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TABLE 4.7 Comcast Corporation—NBC/Universal Business Segments, 2011–2014

Revenue (in millions $) % of Total Operating Income* (in millions $) Revenues

Year 2011 2012 2013 2014 2011 2014 2011 2012 2013 2014

Total 55,842 62,570 64,657 68,775 18,357 19,977 21,434 22,923

Cable Communications

Video (Residential) 19,464 19,952 20,535 20,783 34.9 30.2 High-Speed Internet 8,743 9,544 10,334 11,321 15.7 16.4

(Residential) Voice (Residential) 3,503 3,557 3,657 3,671 6.3 5.3 Business Services 1,953 2,565 3,241 3,951 3.5 Advertising 2,001 2,284 2,189 2,442 3.6 3.5 Other 1,562 1,702 1,880 1,972 2.8 2.8

Total 37,226 39,604 41,836 44,140 66.6 64.2 15,288 16,255 17,205 18,112

NBCUniversal

Cable Networks 8,061 8,727 9,201 9,563 14.4 13.9 3,199 3,303 3,501 3,589 Broadcast Television 5,982 8,200 7,120 8,542 10.7 12.4 124 358 354 734 Filmed Entertainment 4,239 5,159 5,452 5,008 7.6 7.3 27 79 483 711 Theme Parks 1,874 2,085 2,235 2,623 3.4 3.8 830 953 1,004 1,168

Total 19,260 23,812 23,650 25,428 34.4 37.0 3,462 4,107 4,732 5,588

*Before Depreciation and Amortization

Sources: Form 8-K, 2014, pp. 3–4; Form 10-K, 2013, pp. 53, 57, www.sec.gov/Archives/edgar/data/902739/00011 9312514047522/d666576d10k.htm

NBCU’s operations derive revenue from various sources. The Cable Networks segment generates income from subscriptions to channels distributed by multichannel video providers, advertising sales, and program licensing fees.28 Revenue for the Broadcast Television segment owes largely to advertising, as well as program licensing and fees following from retransmission consent agreements. At the end of 2013, Comcast was operating 16 national cable networks, six of which had more than 90 million subscribers.29 Its regional sports and news networks reach more than 35 million subscribers, and Comcast markets programming from its Cable Networks internationally through multichannel video providers as well as over-the-top distributors, including Netflix, Amazon, Apple, and Hulu (of which NBCU owns 32%). Comcast’s nine regional Sportsnet channels serve fans of professional teams in Philadelphia, Washington, Chicago, New York, New England, and California.30

NBC’s broadcast network distributes more than 5,000 hours of programming annually to “virtually all U.S. television households.”31 More than 200 affiliated stations, including 10 local stations, broadcast content produced by NBC or acquired from third parties. NBC owns the rights to transmit sporting events through contractual agreements with the National Basketball Association (NBA), National Football League (NFL), National Hockey League (NHL), Major League Baseball (MLB), PGA Tour, NASCAR, and the English Premier League (soccer). Comcast owns Telemundo, which operates 17 local television stations that collectively reach almost 60% of Hispanic television households in the U.S.32 Table 4.9 presents an overview of broadcast station groups in the U.S.

The Filmed Entertainment segment earns revenue from producing and distributing film content and related assets. Universal Pictures, Focus Features, and Illumination represent the primary production holdings, and NBCU owns a film library of more than 5,000 titles.33 Movie theatres are the primary window for exhibition, after which films are sold and licensed through home- video retailers and television networks, among other distribution channels.

The Theme Parks business generates revenue from box office sales, intellectual property, and spend ing on food, beverages, and merchandise.34 Universal Studios’ attractions in Orlando and Holly wood comprise most of the Theme Parks segment. Along with these locations, and Universal’s Islands of Adventure, the company operates themed hotels and dining and retailing complexes. NBCU also licenses the Universal Studios brand to attractions globally. In addition to operating theme parks and resorts in Japan and Singapore, Comcast has constructions planned or ongoing in cities such as Dubai, Moscow, and Beijing.

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TABLE 4.9 Top 10 TV Station Groups, 2013

Revenues Number of Number of (in billions $) Stations Markets

Served

Fox 1.67 29 18 CBS 1.50 30 18 Sinclair 1.34 162 78 Gannett 1.30 38 30 NBCUniversal 1.29 27 20 Tribune 1.23 51 32 ABC/Disney 1.02 8 8 Media General .972 100 46 Hearst .726 36 26 Univision .697 61 25

Source: Tuna N. Amobi, “Industry Surveys: Broadcasting, Cable & Satellite,” Standard & Poors Capital IQ, October 2014, p. 9.

TABLE 4.8 Comcast Market Share by Product Type, 2014 (%)

Pay-TV Subscribers 33 Home Internet Subscribers 36 Truly High-Speed Internet 47

Subscribers Double-Play Subscribers 55 Triple-Play Subscribers 49

Source: www.freepress.net/comcast-time-warner- cable-too-much-control, accessed February 23, 2015

Finally, Comcast Corporation owns substantial sporting and entertainment properties through a subsidiary, Comcast Spectacor, including an NHL franchise (the Philadelphia Flyers) and the Wells Fargo Center, home to the Flyers and the NBA’s Philadelphia 76ers (previously owned by the company). Comcast has used its ownership stake in these teams, as well as the bargaining clout from its sports networks and large subscriber base, to make exclusive licensing agreements with Philadelphia sports franchises that deny satellite providers the rights to transmit coverage of the Flyers, Phillies, and 76ers.35 Comcast Spectacor is also the principle owner of Global Spectrum, a firm managing numerous entertainment and public assembly venues, including the University of Phoenix Stadium, host of the NFL’s Arizona Cardinals and the 2015 Super Bowl. Set in a Comcast-owned venue and broadcast exclusively by NBC, the Super Bowl, which attracted 120.8 million viewers at its peak—a record for U.S. television—and generated an estimated $360 million in revenue by selling 30 seconds of advertising time for an average price of $4.5 million, was almost entirely under the province of Comcast.36

Typical Strategies and Monopoly Power

In 1984, Philadelphia awarded Comcast a cable franchise, which essentially ensures a local monopoly. On the national level, Comcast has faced frequent allegations of wielding monopolistic market power, most strongly in Susan Crawford’s 2013 book, Captive Audience. Others point to the detrimental impact Comcast has had on American Internet services. As the Financial Times puts it, Comcast’s “meteoric rise in the past decade parallels the relative decline of Internet service in the U.S.” From its global supremacy in the late 1990s, the U.S. fell to 16th on the OECD’s list of top Internet speeds by country in 2013; its average speed of 27 megabits per second was approximately one quarter that of Japan and the Netherlands, and the average cost of $1.10/Mbps in 2013 compared unfavorably with its peers, such as the U.K. ($0.42/Mbps) and South Korea ($0.21/Mbps).37 Studies have found that in the few places in the U.S. where cable companies compete head-to-head, subscriber fees are significantly lower.38 Yet Comcast has used its political clout to menace even those putative challengers qualified to surmount the financial barriers to entering the cable business. When RCN Corporation sought to wire Philadelphia with fiber, the city’s top officials (with encouragement from Comcast lobbyists) dismissed a proposal that would have created hundreds of jobs, injected $250 million in direct investment, and almost certainly provided consumers with better service at lower prices.39

After establishing local monopolies, Comcast has reaped significant profits by continually raising subscription prices above competitive market levels. Unchecked by competition or rate regulation, Comcast has felt little pressure to improve its services or relax its pricing structure. However, Comcast’s most effective strategy, one might argue, is its drive to absorb all challengers.

Over the past several decades Comcast has achieved its favorable position in markets for service provision and content distribution through strategic mergers and acquisitions. After a series of aggressive acquisitions in the early 2000s, Comcast came under increasing criticism from some policymakers and consumer advocates for allegedly becoming a monopoly with the market power to suppress competition and extract undue tolls. Nonetheless, Comcast proceeded unabated, with support from Republican FCC Chairman Michael Powell. It set its sights even higher with its unsuccessful bid to buy the Walt Disney Company for $66 billion in 2004.40 In 2006, Comcast and TWC acquired and divided Adelphia Cable’s assets for $17.6 billion in cash and stock.41 Since 1998, Comcast has completed 87 “communication” mergers and acquisitions, with total transaction value of more than $111 billion; and since 2003, its thirty “media and entertainment” acquisitions represent $41.4 billion in total transaction value.42

Vertical and horizontal integration have expanded Comcast’s market power considerably. Its control of pay-TV infrastructure (and concomitantly the size of its potential subscribers) and

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its vast programming assets (its national and regional networks and NBCU) afford Comcast a strong bargaining position from which to dictate terms in transactions with both distributors and content producers.43 The attempted Comcast – TWC merger would have created the largest multichannel video provider in 87 of the 133 Designated Market Areas in which the companies operate.44 By controlling more infrastructure and more content to license or to leverage toward TV Everywhere services, consolidation has also prepared the firm for competition from over-the-top and IPTV programmers. Reviews of its two most spectacular recent merger activities, with NBCU and TWC, demonstrate how strategic acquisitions advance its interests in both programming and service provision.

In 2009, Comcast announced its intention to acquire NBCU from General Electric.45 After the FCC approved the $30 billion bid in January 2011,46 Comcast took possession of 51% of the company and it claimed GE’s remaining common equity interest in March of 2013.47 According to trade magazine Variety, the merger consolidated “an unprecedented combination of cable, Internet, studio and broadcast assets.”48 Already the largest cable provider in the U.S.,49 with the acquisition of NBCU Comcast became the fourth-largest owner of cable networks, with “access to a whole new slate of marketer relationships.”50 Advertising Age described Comcast’s purchase as a “bet on [the] future of advertising.”51 The deal represented “a calculated move to seize the reins in shaping the future of TV-viewer behavior and a bid to assume the lead in figuring out how to advertise to the new-media consumer.”52 Through the merger, Comcast assumed control of approximately 20% of U.S. television viewing hours.53 In the six years preceding its acquisition by Comcast, NBCU averaged annual profits of $2.79 billion and revenues of $15.9 billion (see Table 4.10).

The FCC’s approval, however, was not unanimous. Commissioner Michael Copps, the lone dissenter, feared that the merger “confers too much power in one company’s hands” and “grievously fails the public interest.”54 Pursuant to these concerns, the FCC stipulated several conditions to preserve competition in markets for content and services. One provision restricts Comcast Cable from favoring NBC content at the expense of other networks. Comcast also must offer NBC programming to satellite, telecom, and online video distributors at competitive prices in “appropriate” circumstances. Other conditions of the merger prohibit discriminatory treatment of online content providers, such as Netflix, which could prevent market entrants from accessing the content necessary to sustain their businesses, and preclude Comcast from using its position as a distributor to “disadvantage” these content providers.55

To please regulators, Comcast also vowed to extend its services to low-income citizens by establishing the “Internet Essentials” program. However, by May of 2014, Comcast had enrolled a mere 12% of eligible families, failed to meet the FCC’s minimum required speeds, and disqualified many constituents—including anyone who is a current or recent Comcast customer. The Consumers Union writes, “this program offers a low-cost, low-level service for some eligible new customers, not help for existing low-income customers, or for struggling seniors, singles,

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TABLE 4.10 NBC Universal, Financials (in millions $)

Year Revenues Profits Total Assets

2005 14,689 3,092 2006 16,188 2,919 2007 15,416 3,107 2008 16,969 3,131 2009 15,436 2,264 34,139 2010 16,901 2,261 42,242

Sources: General Electric Company, Form 10-K, 2010, p. 38; General Electric Company, Form 10-K/A, 2005, p. 38; SNL Kagan, NBCUniversal Media, LLC, accessed January 29, 2015

couples without children, or couples whose children are not school-age.”56 While its failure to satisfy the terms of this mega-merger has fueled critics, Comcast stands by its claim that absorbing its competitors will help “bridge the digital divide.”57

In February 2014, Comcast arrived at a deal to acquire Time Warner Cable (TWC), the second largest cable company in the U.S., for $45.2 billion in stock.58 TWC operates clustered cable systems in five geographic regions, which contributed to $22.1 billion in revenue in 2013.59 In commandeering these cable systems, Comcast would have appropriated 8 million managed customers. Comcast denied that “plausible horizontal harms” could have resulted from the merger and portrayed its voluntary divestiture of 3.9 million subscribers as a gesture of good will.60 Beyond currying favor with the U.S. Department of Justice and the FCC—the agencies that determine whether mergers violate antitrust law or betray public interests—the divestiture would have earned Comcast $7.3 billion from selling and exchanging subscribers from Charter Communications, thereby replacing TWC as the second-largest cable operator.61

The deal would have yielded $1.5 billion in operating efficiencies as well as improved economies of scale, which proponents argued were necessary for Comcast to compete with direct broadcast satellite (DirecTV and DISH) and telecommunications companies (AT&T and Verizon), as well as “disruptive” services offered by Netflix and Amazon.62 They also argued that these size effects would afford increased investment toward innovation in the public interest.63 Opponents countered that the merger would further erode competition in the market for broadband Internet provision and award Comcast undue market power in negotiating upstream with programmers.64

A merger of such media giants would have increased tendencies toward both monopoly and monopsony: Comcast could dictate terms and prices to the buyers of its services—i.e., Internet and television customers—and it could dictate terms and prices to the sellers of the content it distributes—i.e., television programmers and Internet publishers. Furthermore, Comcast could discourage market entry for firms competing with its programming assets and use its control over the data “pipes” to favor certain content providers, extracting tolls from customers needing (or willing) to pay for service sufficient to support data-intensive content, such as streaming video sites or lightning-fast search engines.

In addition, critics of the merger worried that more size and power would make Comcast even less responsive to complaints about its increasing subscription costs and much-maligned customer service.65 As of 2012, among the top six pay-TV service providers, Comcast and TWC charged the highest per-channel subscription fees across three tiers of service (see Table 4.11). Echoing these concerns, The Economist denounced the union, urging policymakers to “reject a merger that would reduce competition, provide no benefit to consumers and sap the incentive to innovate.”66 The cost of cable subscriptions has increased at a rate of almost 6% annually since 1995, more than double

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TABLE 4.11 Comparison of Subscription Costs, 2012

Tier 1 Per- Rank Tier 2 Per- Rank Tier 3 Per- Rank channel channel channel price price price

Comcast $29.99 $0.75 6 $39.99 $0.25 4 $84.99 0.42 6 Time Warner Cable 33.99 1.70 7 49.99 0.25 4 Cox 34.99 0.35 3 65.99 0.24 3 70.99 0.21 3 DirecTV 29.99 0.21 1 34.99 0.23 2 44.99 0.16 2 DISH Network 19.99 0.36 4 24.99 0.13 1 34.99 0.12 1 AT&T U-verse 57.00 0.44 5 72.00 0.27 6 87.00 0.24 5 Verizon FiOS 64.99 0.31 2 74.99 0.26 5 89.99 0.23 4

Source: FCC 15th Report on Video Competition (2013), p. 59, https://apps.fcc.gov/edocs_public/attachmatch/FCC- 13–99A1.pdf, accessed January 22, 2015

the rate of inflation.67 At the beginning of 2014, Comcast’s fastest Internet service offered barely more than one-tenth the download speed of Chattanooga, TN’s municipal broadband network, for a price nearly 50% higher.68 Since then, Comcast has announced plans to make a 2 GB per second service via fiber-to-the-home available to residential customers in Atlanta.69

To counter the claims of its critics, Comcast argued that since it does not compete with TWC in individual markets, the merger would not decrease competition: “This absence of horizontal overlap in local markets means that the transaction will not harm competition or reduce consumers’ choice in any way.”70 Notably, this argument suggests a collusive embargo with other cable providers to avoid direct competition by dividing U.S. markets into local monopolies. Even where duopolies exist, insofar as cable firms compete with telecoms, the burden of competition has been eased by the tacit agreement that AT&T and Verizon would curtail expansion of their fiber infrastructure and instead devote efforts to their wireless businesses, which complement rather than compete with broadband service.71 In the few places where there is “overbuild” of Comcast and Verizon services, “they act as a cozy ‘duopoly,’ keeping prices well above their costs.”72

Unmoved by such allegations, Comcast insisted that the proposed merger would enhance competition and consumer welfare,73 and help maintain and expand “capital-intensive, high-fixed- cost” enterprises “in a space where competition is intense.”74 Although Comcast withdrew from the attempted merger once it became clear that it would likely not pass regulatory muster, the company’s long-term agenda has not been entirely thwarted. Already there are signs that it will continue to expand its footprint, its business offerings, and its array of assets.

Comcast’s vertical integration and its subscriber base give it leverage in developing new ventures. For example, Comcast hopes to improve its systems for using precise, real-time information about customers to deliver personally targeted advertising messages and interactive marketing offers.75

Comcast has long been invested in developing a direct marketing business for digital television, both through its target-marketing subsidiary Comcast Spotlight, and as part of cable industry consortia trying to use direct marketing to derive more revenue from content via video-on-demand (VOD) services.76 By fortifying its ability to bargain for content and monetize its program catalogue through VOD, Comcast hopes to seize customers from Netflix—a long-term agenda already enabled by NBCU. Service providers control a small amount of advertising time (about two minutes per hour); NBCU has agreed to sell some of its commercial time for experiments with advanced advertising formats.77

With data collected from set-top boxes, and its leverage to negotiate carriage deals with programmers who cannot afford to neglect 22 million households, Comcast hopes to strengthen its market position within the digital advertising business. Toward this goal, Comcast is diversifying its digital portfolio through strategic partnerships with online publishers. In addition to considering a deal with VICE, NBCU made a $200 million equity investment in Vox Media, which operates eight online brands (and was already partially owned by Comcast), and a $200 million equity investment in BuzzFeed.78 The sum of these strategies is to make Comcast’s infrastructure indispensable to the delivery of information services and entertainment content to increasing numbers of Americans. At the same time, it seeks to exploit these content assets and the company’s full technical capacity to defend against edge providers and over-the-top services that would threaten to reduce Comcast to the maintenance of simple data conduits, or “dumb pipes.”

Political

This section details some of Comcast’s tactics and instruments for wielding political power. We survey the company’s internal corporate structure before focusing on Comcast’s prodigious lobbying efforts, facilitated through enormous (and shrewdly targeted) expenditures as well as intimate professional relationships among key political actors and Comcast executives and advocates.

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Ownership

Comcast’s ownership structure is labyrinthine. The LexisNexis database of corporate affiliations lists 1,150 companies in Comcast’s family tree, ranking the cable giant 8th among U.S. companies in number of subsidiaries.79 By incorporating “hundreds of state tax-retardant Delaware subsidiaries,” Comcast has ensured that its annual reports rival the thickness of “a small city’s phone book.”80 Resisting the business strategy popular in the cable industry of building up a system under shelter of incentives and tax relief and then selling at a hefty profit, Ralph and now Brian Roberts have retained dominant voting authority even as their share of the company has been diluted (see Table 4.12). Wielding “all the Class B supervoting shares of Comcast stock,” Brian Roberts, like his father did before him, enjoys “effective control over its every step.”81 Comcast executives and board members are well compensated (see Table 4.13). According to data compiled by the AFL-CIO, Brian Roberts was the 24th highest paid CEO in the U.S. in 2014.82

Ties to the State and Lobbying efforts

A Philadelphia Inquirer reporter observed, “Ralph [Roberts] had no great world-improving personal agenda” for his cable enterprise “beyond the imperative to make it larger and more profitable.”83

However, these ambitions are aided by clever political maneuverings. Comcast contributes generously to both major parties, and it bankrolls an “army of lobbyists” to pedal influence in Washington (see Table 4.14). In 2014, Comcast apportioned $3,123,980 to federal candidates, split fairly evenly between Democrats and Republicans.84 While the firm spent more on Democratic candidates, Republican Congressional and Senate committees enjoyed more financial support ($276,625) than parallel Democratic causes ($168,970); and Comcast funded the Speaker of the House of Representatives, John Boehner (R-OH), to the tune of $107,775. Boehner, like his predecessor, Nancy Pelosi (D-CA), is a Comcast shareholder.85 Comcast also operates a Political Action Committee, which totaled disbursements of $3,916,190 from 2013 to the end of 2014

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TABLE 4.12 Shares Held by Insiders (0.53% of Company Shares) (%)

Julian A. Brodsky 8.42 Brian L. Roberts 8.09 Ralph J. Roberts 6.05 Stephen B. Burke 4.13 Michael C. Armstrong 3.85 19 people < 2% 8.47

Source: Mergent Online, Comcast Corp, accessed May 15, 2015

TABLE 4.13 Key Executives and Board Members, 2014 ($)

Position(s) Salary Total Compensation

Brian L. Roberts Chairman, President, Chief Executive Officer 2,857,315 32,961,056 Ralph J. Roberts Chairman Emeritus, Executive Finance 332,846* 22,683,121* Michael Angelakis Vice-Chairman, Chief Financial Officer 1,759,331 18,874,452 Stephen Burke Executive Vice-President, Division Officer 2,652,500 33,915,860 David L. Cohen Executive Vice-President 1,399,137 13,513,179 Neil Smit Vice-President, Division Officer 1,568,546 23,117,973

* For year 2008

Sources: Mergent Online, Comcast Corp, accessed May 15, 2015; SNL Kagan, Comcast Corporation Officers and Directors, accessed February 24, 2015; Bloomberg Business, www.bloomberg.com/research/stocks/people/people.asp?ticker= CMCSA, accessed May 15, 2015

(see Table 4.15).86 Of Comcast’s nearly $5 million in political contributions during the 2014 election cycle, $3,123,980 went to candidates, and more than two-thirds of that money passed through PACs.87

The Roberts family has a long history of Democratic patronage, and Brian Roberts continues this tradition, with personal donations of $76,000 since 2006 (compared to the $13,500 he has given to Republicans).88 On the other hand, Comcast hosted the 2000 Republican National Convention, providing a venue as well as free and favorable news coverage. While Comcast has always acted shrewdly—playing both sides and acting primarily out of competitive interest and not ideological allegiance—the company retains deep ties to Democratic leadership. These relationships bring into focus the profound influence of David Cohen.

Formally, David Cohen is Comcast’s Executive Vice President and a top shareholder. It is a well-known secret, however, that Cohen is Comcast’s primary power broker.89 In 2000, the same year he represented Philadelphia in negotiating Comcast’s propitious 15-year franchise agreement, Cohen served as co-chair of the Republican National Convention. Soon after, Comcast invented the position of “executive vice president for policy”90 for Cohen, who was chief of staff to Ed Rendell, then Mayor of Philadelphia and later Governor of Pennsylvania.91 These affiliations indicate Cohen’s stature in local politics. Since 2008 he also has been Chairman of the Board of Trustees of the University of Pennsylvania. This research institution has a $9.6 billion endowment and strategic property holdings, and it is the largest private employer in Philadelphia.

Cohen has become well known as one of President Barack Obama’s most invested benefactors. Since 2007, Cohen has raised $2.22 million for the President’s election campaigns.92 In 2011, the year “Cohen successfully sheparded [sic] the regulatory review of Comcast’s merger with NBCUniversal,” he hosted a dinner fundraiser at his home in Philadelphia at which each of the roughly 120 guests reportedly donated at least $10,000 toward Obama’s re-election.93 Cohen subsequently repeated similar feats; on one such occasion in 2014, President Obama remarked, “I have been here so much the only thing I haven’t done in this house is have seder.”94

While Cohen has donated to far-Right politicians like Tom Corbett, Eric Cantor, and Orrin Hatch, and Fred Upton, the Republican Chairman of the House Committee on Energy and Commerce (which oversees telecommunications policy),95 Comcast’s “top lobbyist”96 has earned his reputation as a Democratic Party sweetheart. Yet, Cohen, whom Susan Crawford describes as “the political genius pulling the strings on behalf of Comcast,”97 is not a registered lobbyist— a technicality that affords Cohen considerable latitude in pursuing legislative objectives outside normal procedures of documentation and oversight.98

Even discounting Cohen’s considerable influence, Comcast commands one of the most powerful lobbies in the United States. It spares little expense in aggressively advocating for a light- touch regulatory framework for telecommunications industries, including tax exemptions for

82 Lee McGuigan and Victor Pickard

TABLE 4.14 Comcast Corporation—NBC/Universal Political Contributions and Lobbying, 2014 Election Cycle ($)

Contributions to candidates 3,123,980 Contribution to Leadership PACs 930,500 Contributions to Parties 787,535 Contributions to 527 committees 79,575 Contributions to outside spending groups 6,400 Lobbying 35,780,000*

*Sum of 2013 and 2014 lobbying expenditures

Source: www.opensecrets.org/orgs/summary.php?id=D000000461

TABLE 4.15 Comcast Corporation and NBCUniversal Political Action Committee, 2013–2014 ($)

Total Receipts 4,282,975 Total Disbursements 3,916,190 Cash on hand 955,077

Source: Federal Election Commission, www.fec. gov/fecviewer/CandidateCommitteeDetail.do?can didateCommitteeId=C00248716&tabIndex=1

Internet service providers, freedom to integrate vertically and horizontally through mergers and acquisitions, and exclusion from common carrier status and network neutrality obligations. Since 2010, Comcast’s lobbying expenditures total more than $83 million (see Table 4.16), with the largest outlays not surprisingly in years in which the firm was seeking regulatory approval (of NBCU and TWC mergers) or protection (against net neutrality). Its $18.8 million in federal lobbying expenses ranked 6th nationally in 2013.99 Comcast increased its spending in each quarter of 2014, with $5 million of the nearly $17 million annual total coming in the fourth quarter.100

Comcast deployed approximately 76 lobbyists across 24 firms to advocate for its failed merger with TWC.101 Registered among these lobbyists were 28 “former congressional and White House staffers”102 who have “deep ties to the committees that will evaluate the deal.”103 The patronage between industry and regulators is even more dramatic in full view; according to the Center for Responsive Politics’ assessment of compiled public filings, 116 out of 141 lobbyists working for Comcast Corporation in 2013–2014 “have previously held government jobs.”104 Members of organizations funded by Comcast, including the American Enterprise Institute and the University of Pennsylvania’s Center for Technology, Innovation, and Competition, lined up to advocate for FCC approval of the TWC merger.105 Comcast’s political donations and fundraising for specific legislators raises many concerns about undue political influence, but the “revolving door” phenomenon in particular suggests “regulatory capture.” It was not lost on critics that within months of the NBCU merger’s approval, one of the FCC commissioners presiding over the decision, Meredith Attwell Baker, went to work as a lobbyist for Comcast-NBCU.106

Corporate Board Members and Interlocks with Other Organizations

Comcast board members are well connected in the business world. According to Bloomberg’s business database, Brian Roberts has 80 board relationships, Neil Smit has 82, and J. Michael Cook leads with 162. Table 4.17 lists the board members along with some of their notable postings. While these names will fly under the radar of general public awareness, board members’ affiliations betray strategic partnerships, including those with connections to large financial institutions like Citigroup, Bank of New York Mellon, and Fannie Mae. Some members sit on the boards of cultural and educational institutions, ranging from famed museums and art galleries, to some of the most prestigious and well-endowed private universities in the U.S. (Penn, Columbia, and Duke). Perhaps most notably, Edward Breen is a former president and CEO of General Instrument and Motorola—the former, a Pennsylvania-based hardware manufacturer, was purchased by the latter in 2000. Both firms have been integral to the development of cable set-top boxes. Joseph Collins, now part of Aegis, a global security contractor with offices in more than 60 countries,107

was previously chairman and CEO at Time Warner Cable and its interactive media business, and before that the president of Home Box Office.

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TABLE 4.16 Comcast Corporation Lobbying Expenditures ($)

2010 12,937,000 2011 19,615,000 2012 14,750,000 2013 18,810,000 2014 16,970,000

Sources: http://soprweb.senate.gov/; www.opensecrets.org/lobby/clientsum.php?id=D000000461&year=2010; www.opensecrets.org/lobby/clientsum.php?id=D000000461&year=2011; www.opensecrets.org/lobby/clientsum.php?id=D000000461&year=2012; www.opensecrets.org/lobby/clientsum.php?id=D000000461&year=2013; www.opensecrets.org/lobby/clientsum.php?id=D000000461&year=2014

84 Lee McGuigan and Victor Pickard

TABLE 4.17 Comcast Corporation – NBC/Universal Board of Directors

Director Positions Held/Director Interlocks

Kenneth J. Bacon • RailField Partners [financial advisory and asset management]/Partner • Forest City Enterprises [real estate] • Fannie Mae/Executive Vice-President, multifamily mortgage business

(2005–2012); interim Executive Vice-President, housing and community development (2005)

Sheldon M. Bonovitz • Duane Morris LLP [law firm]/Chairman Emeritus • Children First Fund [Philadelphia]/Chairman • Dolfinger-McMahon Charitable Trust/Trustee • Christian R. and Mary F. Lindbach Foundation/Trustee • Barnes Foundation/Board of Trustees • Curtis Institute of Music/Board of Trustees • Free Library of Philadelphia Foundation/Board of Trustees • Philadelphia Museum of Art/Board of Trustees

Edward D. Breen • Tyco International Ltd./Chairman of the Board • New Mountain Capital/Advisory board • Motorola/President and CEO (2002); Executive VP and President, networks

sector (2001–2002) • General Instrument Corporation/Chairman, President. and CEO (1997–2000)

Joseph J. Collins • Aegis, LLC/Chairman • AOL Time Warner Interactive Video/Chairman and CEO (2001–2003) • Time Warner Cable/Chairman and CEO (1989–2001) • Home Box Office Inc./President (1984–1988)

J. Michael Cook • International Flavors & Fragrances, Inc./Director • Accountability Advisory Panel to the Controller General of the United

States/Chairman • Advisory Council of the Public Company Accounting Oversight

Board/Emeritus member • Deloitte & Touche/Chairman and CEO (?–1999) • Comeback America Initiative/Chairman of the Board • National Association of Corporate Directors’ Blue Ribbon Commissions on

Corporate Governance and Audit/Member

Gerald L. Hassell • Bank of New York Mellon/Chairman and CEO • Duke University/Board of Trustees • Columbia University Medical Center/Board of Visitors • Financial Services Roundtable and Financial Services Forum/Member • Big Brothers/Big Sisters of New York/Vice Chairman • New York Philharmonic/Board member • Economic Club of New York/Board member • September 11 Memorial & Museum/Board member

Jeffery A. Honickman • Pepsi Cola & National Brand Beverages, Ltd./CEO • Antonio Origlio Inc. [beverage distributor]/VP and Secretary • American Beverage Association/Board of directors • Dr. Pepper Snapple Bottlers Association/Board of directors • St. Joseph’s University Academy of Food Marketing/Board of Trustees • National Museum of American Jewish History/Board of Trustees

Eduardo G. Mestre • Evercore Partners Inc. [investment banking advisory firm]/Senior Advisor • Citigroup/Chairman, global investment bank (2001–2004) • Avis Budget Group, Inc./Board of directors

Labor

At the end of 2014, Comcast retained approximately 139,000 full- and part-time employees, with approximately 84,000 and 43,000 associated with the Cable Communications section and NBCUniversal section, respectively.108 Comcast’s willingness to commit time, money, and effort toward gaining political influence starkly contrasts with its approach to resourcing its work- force. According to a publication of the International Brotherhood of Electrical Workers (IBEW), “Comcast has a well-earned reputation as one of the most anti-union companies in the telecommunications industry.” One IBEW representative accuses Comcast of resorting to spending “millions to fight a union contract that might cost them $10,000.”109 Some policies and practices affecting technicians and service staff have faced public scrutiny. Disclosures of internal documents reveal incentive structures for sales and support workers that reward hard-sell tactics and have motivated customer retention employees to adopt attrition strategies to frustrate would-be defectors. Technicians face similar pressure to sell Comcast services, while their overloaded schedules and reportedly insufficient training contribute to the company’s notoriously poor service.110

Local Politics

Locally in Philadelphia, Comcast has come under much criticism for dodging taxes, interfering with local politics, contributing to anti-labor campaigns, and providing sub-par services. In 2004, Comcast embarked on the planning and construction of its new headquarters, a 57-story skyscraper in Center City, Philadelphia. After a controversial and ultimately failed effort to obtain designation as a Keystone Opportunity Zone—a program awarding subsidies to incentivize business development in blighted urban areas—the city’s wealthiest company was granted $42.75 million in government funding for the new Comcast Center. Governor Ed Rendell directed $30 million from a Redevelopment Assistance Budget to Comcast, and Pennsylvania’s Department of Economic and Community Development provided an additional $12.75 million in grants, tax credits, and job training assistance.111 Now, Comcast looks forward to $40 million in financial assistance from public coffers as it erects a new Innovation and Technology Center, a 59-story building located blocks away from its headquarters, which is expected to cost $1.2 billion.112 As it did with the Comcast Center, the company is requesting relief from property taxes for a decade

Comcast Corporation 85

TABLE 4.17 Continued

Director Positions Held/Director Interlocks

Brian L. Roberts • National Cable & Telecommunications Association/Board of Directors; Chairman (two terms)

• Business Roundtable/Member • President’s Council on Jobs and Competitiveness/Member • CableLabs [research consortium for cable industry]/Director Emeritus

Ralph J. Roberts • President (1969–1990 • Chairman of the Board (1984–2002)

Jonathan A. Rodgers • TV One/President and CEO • Nike, Inc./Board of Directors • CBS Television Stations Division/President

Dr. Judith Rodin • Rockefeller Foundation/President • University of Pennsylvania/President (1994–2004) • Citigroup/Board of Directors

Source: www.cmcsa.com/directors.cfm

through Philadelphia’s tax abatement for new construction, which will deny millions of dollars to one of the most impoverished large cities in the United States—one in which the nearly bankrupt public school system depends on income from property taxes.113 Further, Comcast has pocketed $4.6 million annually in tax exemptions through the abatement agreement on the Comcast Center; meanwhile the city was forced to borrow $50 million in 2013 in an emergency measure to open schools in August.114

Cultural Profile

Of all forms of power, cultural influence is arguably the most difficult to ascertain. Comcast’s vast holdings offer it many opportunities to exert subtle forms of influence, a kind of soft power that extends its reach into symbolic and ideological spheres. For example, Comcast was integral to the development of QVC, the home shopping channel that would later be described in Advertising Age as “the fastest legal way there is to make money.”115 Joseph DiStefano agrees with this assessment. In his critical history of the cable giant, he writes of QVC, “The world’s biggest electronic retailer was the best investment Comcast had ever made, proving the greatest, steadiest, and fastest-rising share of the company’s sales and profits.”116 However, it is through Comcast’s NBCU holdings that it is able to control popular products and services that hold a special place within culture.

It is consistent with longer historical patterns that NBC serves as a core component of a vertically integrated conglomerate, wielding much control over both content and conduit. The National Broadcasting Corporation’s genesis traces back to Marconi’s telegraph patents and the Radio Corporation of America (RCA).117 RCA, a concern integrating the manufacturing interests of General Electric and Westinghouse with AT&T’s transmission infrastructure, was a U.S. government-sanctioned monopoly. Facing threats of antitrust measures, RCA purchased AT&T’s radio stations and leased the latter’s transmission lines to knit together other holdings into a national network. On November 15, 1926, the debut of NBC inaugurated “a new epoch in American life.”118 The broadcast historian Eric Barnouw observed that “NBC, like RCA, was born with a silver spoon. It had behind it the wealth of huge corporations.”119 Its ambitions matched its pedigree. “Through NBC,” it was promised, “events of national importance would be broadcast throughout the United States.”120 For a population still widely dispersed and negotiating tensions and opportunities related to immigration and urbanization, the “institution of NBC,” historian Michele Hilmes explains, “effectively provided the technical, economic, and cultural unification” necessary for coherence around an imagined national identity.121

Today, as mentioned above, Comcast controls 10 NBC-owned local television stations and more than 200 affiliates, distributing 5,000 hours of programming to almost the entire universe of U.S. television households. It also operates 17 broadcast stations through Telemundo, which (along with Univision) constitutes one half of an effective duopoly of the Spanish-language television market in the U.S. Its extensive holdings of cable networks (see Table 4.18), spanning various genres, enjoy national distribution and furnish many symbolic resources through which Americans construct their realities and public cultures.

NBCU holdings also extend Comcast’s reach into the global arena, primarily through the export of film and television content. While NBCU’s foreign revenue was only $4.76 billion in 2013,122

its international film distribution and, perhaps as important, its involvement in broadcasting the Olympic Games, which is an almost unmatched international media spectacle, extend Comcast’s cultural influence globally. The $4.38 billion NBCU paid in 2011 to secure its franchise to televise the Games through 2020 was the largest bid in Olympic history.123 An agreement negotiated in 2014 with the International Olympic Committee extends NBCU’s broadcast rights through the year 2032.124 Comcast likely sees international sports programming as a strategic asset for building

86 Lee McGuigan and Victor Pickard

its properties globally. For example, it paid $600 million to win broadcasting rights to the soccer World Cup from 2015 through 2022—nearly double Univision’s outlay for the previous World Cup license fee.125

Conclusion

Like many large corporations, the root of Comcast’s power often eludes visibility. As we have demonstrated above, Comcast commands political, economic, and cultural dominance through both subtle and overt means. But Comcast’s rise to power cannot be solely attributed to its political cunning and business prowess; it was enabled by specific policies and policy failures. Because unchecked corporate power poses problems for democratic societies, Comcast’s monopolistic practices deserve closer regulatory scrutiny than they have yet received. If news and information are to be considered public goods with tremendous positive externalities that benefit society as a whole, and if it is clear that perverse incentives in a vertically integrated, monopolistic media firm are preventing these public goods from being produced in sufficient quality and quantity, then this situation qualifies as a market failure, one that should be addressed via public policy.126

Whether this takes the form of antitrust intervention, or the creation of structural alternatives like municipal broadband, or ideally both, we should also consider measures that prevent the situation from worsening. Preventing Comcast from merging with Time Warner Cable to create a massive Internet and cable television monopoly was an important victory for the public interest and for democracy. But in reality, it merely preserved the status quo, albeit preventing a bad situation from worsening. We need to think more proactively about the long-term viability of our com - munication system and to what extent it serves democracy as opposed to commercial imperatives. It might be time to seriously consider whether we have enabled “too big to fail” media companies. Perhaps it is time to consider breaking them up.

Notes

1 Vanna Le, “Global 2000: The World’s Largest Media Companies of 2014,” Forbes, May 7, 2014. www. forbes.com/sites/vannale/2014/05/07/global-2000-the-worlds-largest-media-companies-of-2014/

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TABLE 4.18 Comcast/NBCU Cable Holdings, 2015

Cable Network Approximate U.S. Subscribers (in millions)

U.S.A. Network 96 Syfy 95 MSNBC 95 E! 94 CNBC 94 Bravo 92 NBC Sports Network 81 Golf Channel 79 Oxygen 78 Esquire Network 70 Sprout 58 Chiller 39 CNBC World 38 Universal HD 31 Cloo 26

Source: Comcast Form 10-K, 2014 p. 8.

2 Comcast, 2014 Form 10-K, filed with U.S. Security and Exchange Commission, February 27, 2015, p. 46. www.sec.gov/Archives/edgar/data/902739/000119312515068526/d817352d10k.htm#toc 817352_8

3 Susan Crawford, “Here’s Why the Comcast-Time Warner Merger Is Bad.” MIT Technology Review, April 10, 2014. www.technologyreview.com/view/526461/heres-why-the-comcast-time-warner- merger-is-bad/

4 Tony Lenoir, “Footprint Maps and Market Statistics of Pro Forma Comcast and Charter,” SNL Kagan, January 21, 2015.

5 For a critical journalistic account of Comcast’s history, see Joseph N. DiStefano, Comcasted (Philadelphia: Camino Books, 2005).

6 Ibid., p. xii. 7 Ibid., p. xiii. 8 Ibid. 9 Ibid., pp. 109–115.

10 Comcast Corporation, 2001 Form 10-K, filed with U.S. SEC, March 29, 2002, p. 2. http://files. shareholder.com/downloads/CMCSA/4018718831x0xS950159–02–191/22301/filing.pdf

11 Comcast Corporation, 2004 Form 10-K, filed with U.S. SEC, March 23, 2005, p. 48. http://files. shareholder.com/downloads/CMCSA/4018718831x0xS1047469–05–4437/1166691/filing.pdf

12 William H. Melody, “Audiences, Commodities, and Market Relations,” in The Audience Commodity in a Digital Age, eds. Lee McGuigan and Vincent Manzerolle (New York: Peter Lang, 2014), p. 24.

13 Comcast, 2006 Annual Report, pp. 26–27. http://files.shareholder.com/downloads/CMCSA/63355407 x0xS1193125–07–39301/1166691/filing.pdf; Comcast, 2014 Form 10-K, pp. 119–121.

14 Comcast, 2014 Form 10-K, p. 3. 15 Tuna N. Amobi, “Industry Surveys: Broadcasting, Cable & Satellite,” Standard & Poors Capital IQ,

October 2014, p. 10. 16 Sarah Kahn, “IBISWorld Industry Report 51711a. Cable Providers in the U.S.,” December 2014, accessed

January 22, 2015; Billy Hulkower, “Pay TV and Home Communications Services—U.S.—October 2014,” Mintel, accessed January 22, 2015.

17 Comcast, 2012 Form 10-K, filed with U.S. SEC, February 2, 2013, p. 50. www.sec.gov/Archives/ edgar/data/1166691/000119312513067658/d458593d10k.htm. See also Federal Communications Commission, “FCC 13–99. Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming: Fifteenth Report,” July 22, 2013, p. 70. https://apps.fcc.gov/ edocs_public/attachmatch/FCC-13–99A1.pdf

18 Hulkower, “Pay TV, Mintel,” accessed January 22, 2015. 19 Deborah Yao, “Redefining Broadband and the Comcast-Time Warner Merger,” SNL Kagan, January

15, accessed January 29, 2015. 20 SNL Kagan, “Comcast Corporation Corporate Profile,” accessed February 24, 2015. 21 Comcast, 2014 Form 10-K, pp. 3–4. 22 Ibid., p. 46. 23 Comcast, 2013 Form 10-K, filed with U.S. SEC, February 12, 2014, p. 86. www.sec.gov/Archives/

edgar/data/902739/000119312514047522/d666576d10k.htm 24 Ibid. 25 Ibid., p. 118. 26 Vinesh Kumar, “When is the Cable ‘Buy’ Set to Come?” The Wall Journal, April 3, 2008, C3. FCC,

“Comments of Free Press to FCC,” September 4, 2009, pp. 41–43. http://apps.fcc.gov/ecfs// document/view?id=7020037662

27 David Talbot, “When Will the Rest of Us Get Google Fiber?” MIT Technology Review, February 4, 2013. www.technologyreview.com/news/510176/when-will-the-rest-of-us-get-google-fiber/. See also Susan Crawford, Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age (New Haven, CT: Yale University Press, 2013), p. 10.

28 Comcast, 2013 Form 10-K, p. 87. 29 Ibid., p. 8. 30 FCC 13–99, p. 194. 31 Comcast, 2013 Form 10-K, p. 9. 32 Ibid., p. 11. 33 Comcast, 2014 Form 10-K, p. 11. 34 Ibid., p. 12. 35 DiStefano, Comcasted, pp. xiii–xiv, 2. 36 Rick Kissell, “Update: Super Bowl on NBC Draws Record U.S. Television Audience,” Variety, February

2, 2015. http://variety.com/2015/tv/ratings/super-bowl-ratings-hit-all-time-high-with-patriots-win- on-nbc-1201421267/. Meg James, “NBC Scores a Record Haul from Super Bowl Ad Sales,” Los Angeles

88 Lee McGuigan and Victor Pickard

Times, January 29, 2015. www.latimes.com/entertainment/envelope/cotown/la-et-ct-nbc-super-ads- 20150129-story.html. Three years earlier, NBC raised $259 million in advertising revenue by broadcasting the 2012 Super Bowl. Meg James, “Comcast Profit Jumps 30%, with Mixed Results at NBCUniversal,” Los Angeles Times, May 2, 2012. http://latimesblogs.latimes.com/entertainment newsbuzz/2012/05/comcast-corp-earnings-.html.

37 Edward Luce, “Corporate Ties Bind U.S. to a Slow Internet,” Financial Times, February 24, 2013. www.ft.com/cms/s/0/98e2a5fc-7c54–11e2–99f0–00144feabdc0.html#axzz3VEiAE2Tn

38 General Accounting Office, Issues Related to Competition and Subscriber Rates in the Cable Television Industry. October 2003. www.gao.gov/new.items/d048.pdf; FCC, Report on Cable Industry Prices, December 15, 2014. http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db1215/DA-14–1829A1.pdf

39 DiStefano, Comcasted, p. 120. 40 Ibid., pp. xii–xv. 41 Comcast Corporation, Form 8-K, filed with U.S. SEC, April 26, 2005. http://pdf.secdatabase.com/

2179/0000950103–05–001292.pdf 42 SNL Kagan, “Comcast Corporation M&A History,” accessed February 24, 2015. 43 FCC 13–99, p. 34. 44 Tony Lenoir, “Footprint Maps and Market Statistics of Pro Forma Comcast and Charter,” SNL Kagan,

January 21, 2015, accessed January 29, 2015. 45 Tim Arango, “G.E. Makes it Official—It Will Sell NBC to Comcast,” New York Times, December 3,

2009. www.nytimes.com/2009/12/04/business/media/04nbc.html?scp=7&sq=arango%20comcast&st= Search

46 Tim Arango and Brian Stelter, “Comcast Receives Approval for NBC Universal Merger,” New York Times, January 19, 2011, B9. www.nytimes.com/2011/01/19/business/media/19comcast.html?_r= 1&scp=10&sq=arango%20comcast&st=Search

47 Comcast, 2013 Form 10-K, p. 2. 48 Ted Johnson, “FCC Approves Comcast-NBC U Merger,” Variety, January 18, 2011. www.variety.com/

article/VR1118030437 49 Brian Stelter, “Comcast Posts 7% Rise in Revenue as Subscribers Buy Bigger Cable Packages,” New

York Times, February 16, 2011. www.nytimes.com/2011/02/17/business/media/17comcast.html ?scp=13&sq=brian%20stelter%20Comcast%202011%20largest%20cable&st=Search

50 Brian Steinberg, “Comcast Play for NBC Universal a Bet on Future of Advertising,” Advertising Age, November 9, 2009. http://adage.com/article/mediaworks/comcast-bid-nbc-universal-a-bet-future- advertising/140383/

51 Ibid. 52 Ibid. 53 Ibid. 54 Johnson, “FCC Approves,” Variety. 55 FCC, Memorandum Opinion and Order, FCC 11–4, http://corporate.comcast.com/images/FCC-

Order-on-NBCU.pdf 56 “Consumers Union Debunks Comcast’s Five Biggest Promises About Time Warner Cable Merger,”

Consumers Union, February, 11, 2015. https://consumersunion.org/news/consumers-union-debunks- comcasts-five-biggest-promises-about-time-warner-cable-merger/

57 Comcast Corporation and Time Warner Cable Applications and Public Interest Statement. http:// corporate.comcast.com/images/Comcast-Public-Interest-Statement-April-8.pdf, pp. 59–66.

58 Amobi, “Industry Surveys,” p. 1. 59 Time Warner Cable, 2013 Form 10-K, filed with U.S. SEC, February 18, 2014. www.sec.gov/

Archives/edgar/data/1377013/000119312514056642/d640670d10k.htm 60 Comcast Corporation and Time Warner Cable, “Applications and Public Interest Statement.”

http://corporate.comcast.com/images/Comcast-Public-Interest-Statement-April-8.pdf, p. 6. 61 Amobi, “Industry Surveys,” p. 1. 62 In 2015, AT&T completed its purchase of DirecTV, the largest satellite provider in the U.S. 63 David L Cohen, (2014) “Comcast and Time Warner Cable File Applications and Public Interest Statement

with FCC.” Comcast Voices (blog), April 8, 2014. http://corporate.comcast.com/comcast-voices/ comcast-and-time-warner-cable-file-applications-and-public-interest-statement-with-fcc

64 Kate Tummarello, “Netflix Joins Opponents of Comcast-TWC Merger,” The Hill, April 21, 2014. http://thehill.com/policy/technology/204011-netflix-opposes-comcast-merger-raises-prices. Tim Wu, “Comcast Versus the Open Internet,” The New Yorker, February 24, 2014. www.newyorker.com/ online/blogs/elements/2014/02/comcast-versus-the-free-internet.html

65 Tim Wu, “The Real Problem with the Comcast Merger,” The New Yorker, February 14, 2014. www. newyorker.com/online/blogs/elements/2014/02/the-real-problem-with-the-comcast-merger.html. Daniel Denvir, “Welcome to Comcast Country,” New York Times, April 23, 2014. www.nytimes.com/ 2014/04/24/opinion/welcome-to-comcast-country.html?smid=tw-share

Comcast Corporation 89

66 “Turn It Off,” The Economist, March 15, 2014, p. 14. 67 FCC, “Report on Cable Industry Prices,” December 15, 2014, p. 9. https://apps.fcc.gov/edocs_

public/attachmatch/DA-14–1829A1.pdf 68 Nick Russo et al., The Cost of Connectivity 2014. New America Foundation’s Open Technology Institute,

October 2014, p. 29. https://static.newamerica.org/attachments/229-the-cost-of-connectivity- 2014/OTI_The_Cost_of_Connectivity_2014.pdf

69 “Comcast Begins Rollout of Residential 2 GIG Service in Atlanta Metro Area,” April 2, 2015. http://corporate.comcast.com/news-information/news-feed/comcast-begins-rollout-of-residential-2- gig-service-in-atlanta-metro-area

70 Comcast, “Comcast and Time Warner Cable Transaction Fact Sheet,” http://corporate.comcast.com/ images/Transaction-Fact-Sheet-2–13–14.pdf. See also, “Testimony of C. Scott Hemphill,” Oversight Hearing on Competition in the Video and Broadband Markets: The Proposed Merger of Comcast and Time Warner Cable, May 8, 2014. http://judiciary.house.gov/_cache/files/14da5814–6ef9–4313–8ce7- ce81440a7198/hemphill-testimony.pdf

71 Crawford, Captive Audience, pp. 9–10. “Turn It Off,” The Economist, p. 14. 72 John Cassidy, “We Need Real Competition, Not a Cable-Internet Monopoly,” The New Yorker,

February 13, 2014. www.newyorker.com/news/daily-comment/we-need-real-competition-not-a- cable-internet-monopoly.

73 Comcast, “Applications and Public Interest Statement,” http://corporate.comcast.com/images/ Comcast-Public-Interest-Statement-April-8.pdf

74 Ibid., p. 1. 75 Ibid., pp. 100–106. 76 Lee McGuigan, “Direct Marketing and the Productive Capacity of Commercial Television: T-

commerce, Advanced Advertising, and the Audience Product,” Television & New Media 16(2): 196–214 (2015).

77 Jeanine Poggi, “What Comcast-Time Warner Cable Means for Advertising,” Advertising Age, February 14, 2014. http://adage.com/article/media/comcast-time-warner-cable-means-advertising/291713/

78 Lukas I. Alpert, “Comcast Invests $200 Million in Vox Media,” Wall Street Journal, August 12, 2015. http://blogs.wsj.com/cmo/2015/08/12/comcast-invests-200-million-in-vox-media-valuing-digital- media-firm-at-1-billion/. Chris Ariens, NBCUniversal Invests $200 Million in BuzzFeed, Adweek, August 18, 2015. www.adweek.com/news/television/nbcu-invests-200-million-buzzfeed-166444

79 LexisNexis Corporate Affiliations, “Comcast Corporation” March 3, 2015. 80 DiStefano, Comcasted, p. 30. 81 Crawford, Captive Audience, p. 67. 82 AFL-CIO, “100 Highest Paid CEOs.” www.aflcio.org/Corporate-Watch/Paywatch-2014/100-

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89 Michael Sokolove, “Comcast’s Real Repairman,” New York Times, April 19, 2014. www.nytimes.com/ 2014/04/20/business/media/comcasts-real-repairman.html

90 Crawford, Captive Audience, p. 193. 91 DiStefano, Comcasted, p. 7. 92 Sink, “Comcast, Time Warner Execs Have Been Big Obama Supporters.” 93 Cecilla Kang, “Comcast Exec David Cohen Raises at Least $1.2 Million for Obama,” Washington Post,

June 30, 2011. www.washingtonpost.com/blogs/post-tech/post/comcast-exec-david-cohen-raises-at- least-12-million-for-obama/2011/06/30/AGHELtsH_blog.html

94 Jonathan Tamari, “David L. Cohen Quite Influential Without Being a “Lobbyist,” Philadelphia Inquirer, March 3, 2014, A1.

95 Ashley Alman and Ryan Grim, “Obama Fundraiser in Philadelphia Sets Million-Dollar Goal,” Huffington Post, November 11, 2013. www.huffingtonpost.com/2013/11/14/obama-million-dollar-fundraiser_ n_4271615.html

96 Alina Selyukj and Liana B. Baker, “Comcast Lobbyist Cohen Meets His Match in FCC’s Wheeler,” Reuters, March 12, 2014. www.reuters.com/article/2014/03/12/us-comcast-timewarnercable-fcc- analysis-idU.S.BREA2B1WA20140312

90 Lee McGuigan and Victor Pickard

97 Crawford, Captive Audience, p. 6. 98 Tamari, “David L. Cohen Quite Influential,” Philadelphia Inquirer. 99 Robbie Feinberg, “The Comcast-FCC Revolving Door,” Center for Responsive Politics, April 18,

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102 Michael Hiltzik, “Comcast Deploys its Army of Revolving-Door Lobbyists Against the FCC,” LA Times, May 27, 2014. www.latimes.com/business/hiltzik/la-fi-mh-comcast-deploys-20140527-column.html

103 Rogers, “Comcast, Has About 76 Lobbyists.” 104 www.opensecrets.org/orgs/summary.php?id=D000000461&cycle=2014 105 Eric Lipton, “Comcast Recruits Its Beneficiaries to Lobby for Time Warner Deal,” New York Times,

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106 Amy Schatz, “Republican FCC Commissioner Baker Expected to Leave Post,” Wall Street Journal, May 11, 2011. http://blogs.wsj.com/washwire/2011/05/11/republican-fcc-commissioner-baker-expected- to-leave-post/

107 www.aegisworld.us/who-we-are/ 108 Comcast, 2014 Form 10-K, p. 29. 109 International Brotherhood of Electrical Workers, “Taking on the Walmart of Cable,” The Electrical

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Business Journal, January 3, 2005. www.bizjournals.com/philadelphia/stories/2005/01/03/daily1. html?jst=b_ln_hl

112 Jared Brey, “Details on $40 Million in State and City Grants for New Comcast Tower,” Plan Philly, January 16, 2014. http://planphilly.com/articles/2014/01/16/details-on-40-million-in-state-and-city- grants-for-new-comcast-tower

113 Hannah Sassman, “Letters: No Comcast Contract Till It Pays Its Fair Share,” The Philadelphia Daily News, February 4, 2015. www.philly.com/philly/opinion/20150204_Letters__No_Comcast_contract_ till_it_pays_its_fair_share.html; Denvir, “Welcome to Comcast Country,” New York Times. www.nytimes.com/2014/04/24/opinion/welcome-to-comcast-country.html?_r=0

114 Patrick Kerkstra, “Is Tax Windfall Worth the Wait?” Philly.com, December 14, 2008. http://articles. philly.com/2008–12–14/news/25244782_1_abatements-tax-bills-city-hall-corridors; Rick Lyman and Mary Williams Walsh, “Philadelphia Borrows so Its Schools Open On Time,” New York Times, August 15, 2013.www.nytimes.com/2013/08/16/education/a-city-borrows-so-its-schools-open-on-time.html? pagewanted=all&_r=0

115 Matthew Creamer, “Sellevision: Can a Bald Reporter Hawk Combs on Direct-Response TV?” Advertising Age, May 14, 2007. http://adage.com/article/news/sellevision-a-bald-reporter-hawk-combs-direct- response-tv/116661/

116 DiStefano, Comcasted, p. 92. 117 Eric Barnouw, A Tower in Babel, Volume I (New York: Oxford, 1966), p. 9. 118 Ibid., p. 190. 119 Ibid., p. 189. 120 Ibid., p. 186. 121 Michele Hilmes, Radio Voices: American Broadcasting, 1922–1952 (Minneapolis: University of Minnesota

Press, 1997), p. 22. 122 Comcast, 2013 Form 10-K, p. 174. 123 Anthony Crupi, “NBC Bids $4.38 Billion for Olympic Gold,” Adweek, June 7, 2011. www.

adweek.com/news/television/update-nbc-bids-438-billion-olympic-gold-132319 124 Comcast, 2014 Form 10-K, p. 49. 125 Meg James and Yvonne Villarreal, “Competition Heats Up Among Spanish Language Media Firms,”

Los Angeles Times, May 14, 2014. www.latimes.com/entertainment/envelope/cotown/la-et-ct- univision-telemundo-20140514-story.html

126 Victor Pickard, America’s Battle for Media Democracy: The Triumph of Corporate Libertarianism and the Future of Media Reform (New York: Cambridge University Press, 2014).

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