Policy

King of the Hill: Comcast’s Beltway Sway

9/22/2006 8:00 PM Eastern

The last year and a half has been one of the most intense periods the cable industry has had to deal with in at least a decade in terms of regulatory and legislative issues. And as the nation’s largest operator, Comcast Corp. has been at the forefront of making sure the industry comes out on top, according to Beltway observers and players.

“Comcast has a terrific team in place in Washington,” said Blair Levin, a long-time Washington insider and managing director with Stifel Nicolaus. “The company has upgraded its staff significantly in the few years, and they are very effective and very good at what they do. They work closely with the [National Cable & Telecommunications Association] and other operators and because of that, the cable industry has emerged relatively unscathed in all the big issues that could’ve negatively affected it.”

Historically, leadership at the federal lobbying level has been a shared responsibility between the largest operator at the time and the NCTA, Comcast executive vice president David Cohen said. Comcast has been beefing up its Washington, D.C., presence since it took the top spot a few years ago, and the company takes its responsibility as the industry leader very seriously.

Top executives including CEO Brian Roberts, who is in his second year of a two-year term as NCTA president, and chairman of the executive committee Ralph Roberts, are veterans when it comes to dealing with regulatory and legislative issues.

GOVERNMENT EXPERIENCE

“Many of our executives have government experience or experience working with government,” Cohen said. “And many, including Brian, enjoy the government-affairs process. They know it’s part of their job responsibilities. We believe strongly that as part of the leadership of government affairs that we have an obligation to represent Comcast and the whole industry, which includes distributors, content providers and vendors. We try hard to represent industry issues both publicly and privately. We’re very careful not to represent just Comcast views. We have a great partnership with NCTA and we are huge fans of Kyle [McSlarrow, NCTA president].”

The respect is mutual. McSlarrow said Comcast’s Washington lobbying team is among the best he’s worked with.

“Kerry Knott [vice president of government affairs] is one of the most talented Republican lobbyist operatives and David Cohen is one of the most talented Democratic lobbyist operatives I’ve ever known,” McSlarrow said. “They know the Hill and how it works. It’s the complete tool kit. And they play very well with the rest of the industry.”

That hasn’t always been the case with industry leaders and their abilities as lobbyists. Tele-Communications Inc. was the lead cable dog for a most of the 1980s and 1990s, but the company was not very effective on Capitol Hill. AT&T Broadband, which purchased TCI in 1998, didn’t fare much better when it came to cable issues.

“[TCI CEO] John Malone is a great businessperson and true pioneer in the cable industry,” Cohen said. “But he’d be the first person to admit he didn’t like government. Odds are when you don’t like someone, they aren’t going to like you back. That’s not a great environment to execute proactive government-affairs strategies.”

On the other hand, Cohen said, AT&T Broadband loved government — some might say too much. “But they had loyalties all over the place and cable was only a small piece of that. They brought conflicts and differences in agenda with them.”

As the current industry leader, Comcast doesn’t suffer from those issues, Cohen said. Company executives are comfortable with the inner workings of government and Comcast’s agenda is solely cable-centric. If there is any criticism of operator’s leadership skills in Washington, it’s that the company can dig its heels in and force a fight even when they ought to throw in the towel, one Beltway insider said.

“Comcast’s army is as good as any Washington office,” said the long-time D.C. player who asked to remain anonymous. “They have always been the last to compromise, and that is apparently not changing. But sometimes you have to know that you’re not always going to win and in order to avoid hurting the industry more, you sometimes have to give in a little.” He was referring to the rift between Comcast and the Mid-Atlantic Sports Network, television home of Major League Baseball’s Washington Nationals. The two were at odds earlier this summer over a carriage agreement, and although the two sides came to a resolution, it wasn’t before the Federal Communications Commission weighed in on the issue and said that Comcast may have discriminated against the regional sports network.

AFFECTING THE WHOLE INDUSTRY

But Levin, who served as chief of staff for former FCC chairman Reed Hundt from 1993 to 1997, said Comcast clearly understands its leadership position and the responsibility it entails. He doesn’t think the company made significant tactical errors in its fight with MASN. “They know that what they do affects the whole industry. My sense is that they felt they had the law on their side with the Nationals problem, and this issue between the sports networks and operators is going to be huge going forward. If the networks can get the government to weigh in, it can have a significant financial impact for operators. That was a fight Comcast was willing to take on.”

McSlarrow agreed. “I know there were some operators that were happy that Comcast took on that fight,” he said.

Levin believes cable, led by Comcast, is doing a good job of navigating the swirling regulatory waters. TCI’s reign as head lobbyist in the late 1980s and early 1990s “had to be one of the worst runs of public-policy management ever,” he said. “The most glaring blowback issue was the Cable Act of 1992. There was a lot at stake then and TCI didn’t rise to the challenge. Comcast isn’t going to win every battle it takes on, but they are rising to the challenge and winning the ones they should so far.”

Comcast has upgraded its staff significantly in recent years. “I don’t think of them as an army, per se. Instead I liken them to a special ops force,” Levin said. “They have fewer people and spend less money than other companies, particularly telecom companies.”

But because the company’s lobbying team is larger than any other MSO’s, Comcast is often called upon to take the lead on industry issues. “And they take on that responsibility willingly,” McSlarrow said.

When Cohen came to Comcast four years ago, the company had one full-time lobbyist who mostly concentrated on issues at the FCC. In addition, vice president of external affairs and public policy counsel Joe Waz split his time between Philadelphia and Washington. Today, Comcast’s nine-person lobbying office in Washington is the industry’s largest.

September