Comcast, TWC Pull Dinner Gift for FCC Commissioner... Sort Of
August 15, 2014 1:10 PM
Both companies cited criticism, claim public "misunderstood" their efforts
Comcast Corp. (
) drew many critical comments when it decided to
donate a $110,000 USD gift
to become a "presenting sponsor" at
the Walter Kaitz Foundation’s annual dinner
, a fundraiser for a non-profit who states its mission is seeking "to advance the contributions of women and multi-ethnic professionals in cable."
While Comcast had donated slightly larger gifts to the dinner each year from 2011 to 2013, this year its donation provoked inevitable controversy as the Kaitz Foundation was planning to honor
U.S. Federal Communications Commission
Commissioner Mignon L. Clyburn
with a special award at the dinner. With Commissioner Clyburne currently reviewing Comcast's
$45.2B USD bid
to take over Time Warner Cable Inc. (
), some suggested that this year's contribution could be construed as soft money -- a particularly insidious form of lobbying corruption at work in the American federal government today.
Citizens for Responsibility and Ethics in Washington
(CREW) was the first to criticize the donation,
CREW has noted
, using honorary contributions to lawmakers and regulators’ favored charities to curry favor is one of the more under the radar moves in
Comcast’s merger playbook
—a playbook that also emphasizes lobbying, campaign contributions, and winning support from third-party groups, especially
those representing minorities
That criticism was echoed by
The Washington Post
. Initially Comcast blasted its numerous critics, saying it was "insulted." But as the critics in turn mocked that response and the public scrutiny heated up, Comcast backed down somewhat.
FCC Commission Mignon L. Clyburn [Image Source: AP Photo]
In a letter it wrote:
[The criticism of our gift] are insulting and not supported by any evidence. [However, we are] withdrawing our financial support [of the dinner]... There be no recognition of Comcast at the dinner.... We do not want either the Commissioner or Kaitz to fall under a shadow as a result of our support for diversity in the cable industry….By the same token, we do not want to punish Kaitz or detract from its important work.
That's where the twist comes in. Comcast is still donating to the group the same amount, but it says it won't appear at the dinner and be involved in personally honoring Commissioner Clyburn, as it initially planned.
Time Warner Cable similarly "redirected" a $22,000 USD contribution to the September dinner. In a phone call, it reportedly stated:
[We made the decision] to avoid any further misunderstandings…It’s unfortunate that our long-standing sponsorship of this fundraising event dedicated to advancing diversity in cable has been mischaracterized by a few.
Deadline, which first reported on the withdrawals, writes:
Everyone who’s anyone in cable shows up for the Kaitz dinner, which for decades has been the focal point for the industry’s so-called "hell week" of meetings.
While the cable companies grappled with their PR dustup, Comcast’s chief lobbyist for the deal, EVP David Cohen, was at the FCC making the case. On Monday he and other Comcast execs asked the staffers sorting through the matters to "focus on transaction-specific issues and on protecting competition" instead of "concerns regarding industry consolidation generally," according to a company filing summarizing the discussion.
Despite broad criticism from many consumer rights advocacies, the deal seems to stand a strong chance of passing.
[Image Source: Public Knowledge]
In a recent interview, when asked about the similarities between the merger that created the Sirius XM Holdings Inc. (
) satellite radio monopoly, Commissioner Clyburn stated:
Well from a regulatory standpoint you have to look at the marketplace. Sometimes there's natural monopolies or oligopolies.... It is quite natural. You don't want ten companies digging up the ground at different times. So it is natural in some instances for their to be a monopoly.
If the FCC and
U.S. Department of Justice
(DOJ) don't move to block the merger, Comcast will gain an even more dominant position in the cable TV and high-speed internet markets. It will have a more than a third of the broadband internet market (33 to 50 percent depending on how you define "high-speed") and roughly 30 percent of the paid television market. Remove satellite TV and Comcast would control roughly 60 percent of the cable TV market,
. That would leave Comcast with a monopoly in many regions.
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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