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What Comcast鈥檚 Failed Merger Tells Us 国产视频 Corporate Lobbying

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When Comcast first to merge with Time Warner Cable in early 2014, the suggested that even though everyone knew it was , Comcast would use its lobbying muscle to ram the deal through. After all, the company spends a year on lobbying. Its CEO, Brian Roberts, played golf with the President. Its chief lobbyist, David Cohen, organized a for the President. Isn鈥檛 this how Washington works?

Now, with the news late last week that Comcast was backing out of the merger after regulators sent strong we-won鈥檛-approve-this signals, everybody is trying to explain where the conventional wisdom got it wrong. 聽 that, 鈥渙pponents are hailing Comcast鈥檚 failed strategy as a welcome sign that money can鈥檛 buy everything in Washington.鈥 Senator Al Franken (D-Minn.) attributed it to : 鈥淲e won because ordinary Americans can wield extraordinary power when they raise their voices.鈥

The simple reason that the merger failed was that Comcast and Time Warner Cable had a very weak case. But the key question is not why it failed. It鈥檚 why anyone thought they had any chance of making this deal happen in the first place.

The most likely explanation is that Comcast鈥檚 leaders over-estimated their influence. With so much in invested in lobbying, they had convinced themselves they could work magic in Washington. It鈥檚 an audacity that has come increasingly come to characterize corporate lobbying in Washington, as I describe in my new book, . And it鈥檚 a big problem for our democracy, because it means we鈥檙e going to continue devoting our limited public policy attention to things we shouldn鈥檛 even be debating in the first place.

The New York Times鈥 Eric Lipton picked up on this arrogance in his post-mortem reporting. 鈥淟awmakers and staff members on Capitol Hill, in interviews Friday, cited Comcast鈥檚 swagger in trying to promote this deal,鈥 Lipton . 鈥淭hey said they felt that Comcast was so convinced in the early stages that the deal would be approved that it was dismissing concerns about the transaction, or simply taking the conversation in a different direction when asked about them.鈥

Comcast鈥檚 over-confidence, however, is understandable. After all, the company had successfully navigated the challenges of a previous merger with NBC Universal. 聽Comcast had in Washington in 2014, enough to weigh in on 鈥 reaching as far afield as the farm bill, and . It could flood the zone, and be everywhere, all the time. 聽In an interview with Politico, Rep. Tony C谩rdenas (D-Calif.) marveled, 鈥淚鈥檝e had companies come and sit with me and they would tell me that, 鈥極h, we heard in the hallways that Comcast knew we were having this meeting today.鈥欌 He continued, 鈥淎nd my staff and I are looking at each other like, 鈥榃e sure as hell didn鈥檛 tell them anything.鈥 But that鈥檚 how they鈥檝e blanketed Washington.鈥

Comcast had also bolstered its sense of influence by building up what it called 鈥 mostly like the National Council of La Raza or the National Urban League, which received from the Comcast Foundation. In return, these key Democratic constituency groups had for Comcast鈥檚 top priorities in Washington.

Clearly Comcast miscalculated in the case of this merger. In retrospect, it seems remarkable that the Justice Department would ever have endorsed the country鈥檚 top two cable operators鈥 merging in a way that would give a single company control of and 30 percent of the pay television market. 聽It also seems remarkable that two companies Cable thought they could convince members of Congress to ignore the widespread customer dissatisfaction.

Yet, somehow, Washington spent more than a year debating this issue, sucking up countless precious resources of time and energy both inside Congress in the larger advocacy community. Over the last 12 months, at least according to , the 鈥淐omcast merger鈥 has generated about as much interest as 鈥済lobal poverty.鈥

This data point can stand in for a larger problem. Corporations are the dominant actors in Washington, period. Business spends about $2.6 billion a year on reported lobbying 鈥 about 80 percent of the total lobbying expenditures and roughly 34 times the meager sums spent on lobbying by public interest groups and labor unions combined. This means that large corporations mostly drive the agenda.

Companies like Comcast and Time Warner Cable have the resources and arrogance to get Congress to seriously consider a proposal this outlandish. It鈥檚 a privilege few have. And worse, this policy aggression is a self-perpetuating cycle. The more these big companies spend, the more lobbyists they hire to make the case internally that the company ought to pick a big fight. And so they pick bigger fights, necessitating even more lobbyists.

Yet, while Comcast and Time Warner Cable may have just wasted tens of millions of dollars on lobbying, one group made out quite well: the lobbyists and consultants themselves who got paid to run their campaign, and who keep getting paid to perpetuate the cycle of ever-more ambitious lobbying. Notably, after the deal fell apart, Comcast鈥檚 CEO showing his confidence in the company鈥檚 top lobbyist: 鈥淭here is nobody better than David Cohen,鈥 Brian Roberts wrote. 鈥淗e鈥檚 incredible at what he does and we are beyond lucky that he helps passionately lead so many areas at Comcast.鈥

And while Comcast provoked a large public outcry due to its widespread unpopularity, few companies and mergers have anywhere close to the same potential for grassroots counter-mobilization. The biggest merger deal of 2014, like almost all big mergers, went largely unnoticed by the public (For those keeping score, that deal was a $ between four energy companies that made the biggest energy infrastructure company, Kinder Morgan, even bigger. Kinder Morgan is not the household name Comcast is.) Mobilizing the public can be an effective tool where the public cares. But that only covers a limited number of issues in Washington.

Opponents of the Comcast-Time Warner Cable merger deserve to celebrate, at least a little. They were persistent in making sure that common sense stayed common sense, challenging as that sometimes is. But it was a rear-guard action 鈥 a battle that they never should have had to fight. Especially when currently more than have only one broadband option, and across the U.S., we pay more for worse service than most other advanced industrial economies. Then again, this status quo should explain why Comcast鈥檚 leaders were so emboldened in the first place.

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Lee Drutman
Lee Drutman-2
Lee Drutman

Senior Fellow, Political Reform Program

What Comcast鈥檚 Failed Merger Tells Us 国产视频 Corporate Lobbying