Comcast comes out swinging in defense of merger, blasts Netflix and Discovery

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Comcast made a fierce defense of its controversial plan to swallow rival Time Warner Cable on Wednesday, lashing out with accusations of “extortion” and claims that complaints about the merger are self-interested and “analytically deficient.”

The fighting words came via David Cohen, the company’s head lawyer, who used a blog post and a media conference call to challenge critics and explain why a merger of the country’s two biggest cable and internet providers would be good for consumers.

On the call, Cohen took particular aim at Netflix, claiming the movie streaming company deliberately degraded its traffic on the [company]Comcast[/company] network by failing to plug into alternate interconnection sites on the internet backbone. He also accused the [company]Discovery[/company] network of “extortion” related to a series of “asks” the company has allegedly made behind the scenes as Comcast fights to win government approval of the merger.

The “asks” apparently involved concessions on programming prices, though later on the call, Cohen made clear he was not accusing Discovery of criminal extortion.

Cohen also lambasted Comcast’s corporate and public critics for attempting to tie the merger to complaints that have arisen in another FCC proceeding related to so-called “net neutrality.”

Both the tone and the substance of Cohen’s remarks represent a shift for Comcast, which at the outset of the proposed merger in February had portrayed the deal as a straightforward deal between two cable companies whose markets did not overlap. To preempt opposition, Comcast voluntarily divested subscribers to reduce its overall share of the cable market.

In recent months, however, the discussion surrounding the merger has focused squarely on how much control the combined companies would have over the market for broadband — which, as Om noted at the time, is what the deal is really all about.

Unlike previous remarks he has made on the merger, Cohen addressed the internet issues related to broadband head-on and at length.

“The internet is wide open and faster than ever before,” he said, accusing his critics of “apocalyptic warnings” that he characterized as sky-is-falling rhetoric from the 1990’s.

Despite Cohen’s reassurances, the public may not be convinced that a bigger Comcast would benefit consumers. It recently won an award for “America’s worst company,” and was embarrassed by a widely publicized recording of the frenzied tactics of one of its customer service agent.

In response to a question of whether a merger would improve Comcast’s performance, Cohen acknowledged that its customer service needed to improve and that any staff cuts that arise from the proposed merger will not affect its public-facing operations.

Cohen’s comments came at the close of a public comment period and on day 76 of a 180-day “shot clock” during which time the FCC must examine whether the merger is in the public interest. He added that his comments on Wednesday and the blog post were intended to distill nearly 1,000 pages of comments and reports that Comcast filed with the agency.

The merger is expected to go through next year unless the FCC blocks it on public interest grounds or the Justice Department indicates that it will file an antitrust challenge.

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