By Kate Tummarello - 07/16/14 07:34 PM EDT
Executives from Comcast and AT&T defended their companies’ multibillion dollars to lawmakers Wednesday, citing a need to keep up with the changing online video landscape.
During a Wednesday hearing on the video marketplace held by the Senate Commerce Committee, Comcast Executive Vice President David Cohen and AT&T Senior Executive Vice President John Stankey argued that their multibillion proposed mergers will help the companies compete in a world of increased demand for online video.
Cohen repeated Comcast’s argument that because it and Time Warner Cable do not overlap in any geographical markets, the merger will not reduce competition for any customers.
AT&T and DirecTV are looking to have regulators approve a $49 billion merger, which the AT&T has said will allow the company to better compete with cable providers and provide video options across multiple screen.
A merged AT&T and DirecTV will be a “much more effective nationwide competitor with cable companies” and will be able to create new video models “to give consumers what they want where they want it,” Stankey said.
Committee ranking member John Thune (R-S.D.) defended the mergers and expressed optimism about how the deals could benefit users in rural areas, including South Dakota.
Comcast has pledged to expand its low-income Internet service if the merger is approved, while AT&T has committed to expanding its Internet service to rural and underserved areas.
“I am not convinced they will necessarily change the market in a permanent, or negative, way,” Thune said.
Thune pointed to online — or “over-the-top” — video services from companies like Amazon, Netflix and Apple.
These companies “all are investing tremendous resources in unique and previously impossible ways to capture a greater share of the video marketplace,” he said.
Committee Chairman Jay Rockefeller (D-W.Va.) expressed more concerns about the mergers, backed by testimony from representatives from Dish, Public Knowledge and the Writers Guild of America, West.
“Make no mistake, the video marketplace is at a tipping point,” Rockefeller said.
The Comcast and AT&T mergers “could fundamentally reshape the marketplace,” he continued, encouraging regulators to be “rigorous in their review of the impacts of these transactions on competition and consumers.”