Consumers Make Last Stand to Stop Comcast Deal

With the Federal Communications Commission set to rule favorably as early as today on the proposed merger between Comcast and AT&T, consumer groups are making a last ditch effort to stop the deal by filing an emergency motion to suspend the proceedings at the FCC and another motion designed to at least slow the approval in the D.C. Court of Appeals.

FCC officials declined to officially comment on when the merger announcement might be made, but it is being widely reported the commissioners will approve the deal and sources tell internetnews.com that the FCC staff has recommended approval of the merger.

Comcast, the nation’s third largest cable operator, and AT&T Broadband, the largest cable concern in the country, are seeking to merge in a $33.6 million deal that would create the largest cable company in America with more than 22 million subscribers. The Department of Justice has already consented to the merger when it ; let lapse the period in which it could have filed an objection to the merger.

While the FCC commissioners readied their vote, the Center for Digital Democracy, the Media Access Project, the Consumer Federation of America and the Consumers Union filed a blizzard of legal motions objecting to the merger.

The immediate legal focus point for the consumer groups was a decision Wednesday by the FCC to not require Comcast to publicly reveal details of its Internet service provider deal with AOL Time Warner as part of the FCC merger review. The groups have asked the D.C. Court of Appeals to overturn that decision.

ISPs, including Earthlink, and the consumer groups want the AOL TW agreement to be opened to public comment as part of the FCC’s review. They claim the contract is material to the merger process and may “reflect new concerns about competition and the free flow of information” on Comcast’s broadband network, as well as creating a “dangerous precedent against openness and nondiscrimination” on the Internet as a whole.

While the terms of the agreement have not been made public, published reports claim AOL TW gives Comcast as much as $38 per subscriber and that AOL TW has agreed to not compete with Comcast in some markets.

Although opening the deal to public scrutiny wouldn’t endanger the merger, the advocacy groups hope to re-open the debate on ISPs access to cable companies and the power of cable companies to control the broadband market.

The consumer groups triggered the latest round of legal wrangling when they questioned Comcast President Brian Roberts’ contact with FCC officials, including Chairman Michael Powell. On Oct. 28, Roberts urged Powell to permit AT&T and Comcast to keep its ISP agreement with AOL TW out of public review. Roberts noted the “highly proprietary, confidential nature” of the AOL TW agreement has no “relevance to the merger review.”