Senate Subcommittee Questions Comcast/AT&T Broadband Merger

A merger would create a monster company with almost twice as many subscribers as its nearest rival, AOL Time Warner.

WASHINGTON, D.C. (AP) -- Comcast and AT&T Broadband officials sought to assure senators Tuesday that merging the nation's No. 1 and No. 3 cable providers would give Americans better television and Internet access across the country.

"Combining these two companies, and drawing on the special strengths and capabilities and resources of each, will ensure that more Americans have access to more digital services and features sooner," said Comcast President Brian Roberts.

Lawmakers questioned whether allowing Comcast and AT&T Broadband to combine forces would actually spark more competition, or just create another monopoly. If federal regulators approve, the $45 billion stock deal will create a company with 22.3 million subscribers, almost double the size of the closest rival, AOL Time Warner.

The new company will have cable subscribers in 17 of the country's 20 largest metropolitan areas and a presence in 41 states.

"The creation of this new and even broader communication conglomerate may pose the same dangers to consumers and to innovation that led to the break up of the old AT&T monopoly," said Sen. Herb Kohl, D-Wis., chairman of the Senate Judiciary antitrust subcommittee.

Senators said they worry about information gatekeepers who would allow their customers to get only the information they approve.

"Because the merger would create the largest cable provider in the nation, a merged AT&T/Comcast could have significant power as a major purchaser of content," said Sen. Orrin Hatch, R-Utah. "A merged AT&T/Comcast would have similar power in determining which and how many Internet service providers will have access to consumers over its cables."

The two companies own interest in several national and regional programming services.

"If it's their programming, they'll get our customers, and then they have an incentive to withhold that programming, and they have shown in the past that they will," said Mark Haverkate, president and CEO of WideOpenWest, a broadband communication company in Castle Rock, Colo.

But AT&T and Comcast say the combined operation won't hurt any other operation.

"The merger will not violate any law or regulation and will cause no competitive harm in any relevant market," said C. Michael Armstrong, chairman and CEO of AT&T.

If regulators approve the AT&T-Comcast deal, the merger is expected to be completed at the end of next year.

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