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Rising Profile in D.C.

9/28/2003 8:00 PM Eastern

When it comes to guarding its political interests in the nation's capital, one thing is certain: Comcast cares.

No traditional cable company in recent memory has made a greater public-policy makeover as fast as Comcast Corp., which became the country's largest cable company — and the industry's de facto leader — following last November's purchase of AT&T Broadband.

Once a midsized player with big dreams, Comcast today is a telemedia giant whose dreams keep getting bigger. For better or worse, the company's exalted status inevitably makes it a proxy for all that's good about the cable industry, and all that's not so good. Being the top cable operator, with more than 21 million subscribers, confers both benefits and burdens.

Comcast officials, from president and CEO Brian Roberts on down, know this all too well, and they have moved decisively to enhance the Washington, D.C., office to a point commensurate with the needs of an industry spokesman that must conduct dialogues with Congress, the White House and the Federal Communications Commission to ensure adversaries don't dominate the debate.

Comcast used to thrive here with just one employee — James Coltharp, a former FCC economist who was also a top aide to then-FCC commissioner James Quello. Coltharp helped oversee Comcast's substantial corps of outside lawyers and lobbyists. But after a merger that put Comcast in charge of more cable customers than any cable company had in history, Comcast needed to bolster the Washington office.

Orchestrating the effort was Comcast executive vice president David Cohen, a battle-tested corporate lawyer, Roberts family confidant and political insider from his days as chief of staff to Philadelphia Mayor Edward Rendell (now governor of Pennsylvania).

Since March, Cohen has hired four people, a mix of seasoned Republicans and Democrats who harbor no illusions about how Washington really operates.

"As the largest cable provider, we recognize the need to have more of a presence and more of a capacity in Washington in order to represent not only the company's interests, but also the industry's interest in the federal regulatory and legislative arena," said Cohen, who has been based in Comcast's Philadelphia headquarters since joining the company in July 2002.

A veteran squad

His first move was hiring Kerry Knott as vice president of government affairs. Knott, lured from Microsoft Corp. to head Comcast's office here, is best known from his days as chief of staff to Rep. Dick Armey (R-Texas). A back-bencher who rose to Majority Leader in 1995, the now-retired Armey plotted with then-Rep. Newt Gingrich (R-Ga.) to wrest control of the House from Democrats for the first time in 40 years.

Knott is quarterbacking three other recent Cohen hires: Brian Kelly, a former lobbyist for the Electronic Industries Association, the Walt Disney Co. and the National Association of Broadcasters; Melissa Maxfield, who managed the leadership political action committee Senate Minority Leader Tom Daschle (D-S.D.) uses to fund Democratic Senate candidates; and Jessica Wallace, top cable and broadcasting adviser to House Energy and Commerce Committee chairman Billy Tauzin (R-La.).

"We have a lot of balance, Republican and Democrat, House and Senate, people who have relationships throughout Washington, people who have substantive knowledge of the industry," Cohen said.

Comcast has also quietly added to its assemblage of outside lobbyists, employing the services of Lorine D. Card, sister-in-law of White House chief of staff Andrew Card, and Alfred Mottur, former top telecommunications adviser to Sen. Fritz Hollings (D-S.C.), the senior Democrat on the Senate Commerce Committee.

Republican National Committee chairman Ed Gillespie, a Knott friend from their decade together as aides to Armey, said his old political ally is the right man to manage Comcast's considerable public policy agenda here.

"Kerry Knott is a brilliant strategist and has a great big-picture understanding of issues and how they play and the interplay between the legislative branch, the executive branch, and outside groups," Gillespie said. "He can see a broad range, but he's also very technically smart and knows all the things that need to be done to marshal resources and deliver message."

Bulking up the Washington operation will cost money. Last year, Comcast spent $2.4 million to compensate employees and outside consultants who lobbied for it, a tab that is expected to grow in 2003. But it's worth noting that a big spender like Comcast isn't keeping up with the Baby Bell phone companies. Last year, BellSouth Corp. spent $8.4 million on Washington lobbyists and consultants, according to congressional records.

The issues that dog Comcast dog every cable company. At some point, the General Accounting Office is going to release a cable programming price report, expected to be critical of operators like Comcast.

An aide to Sen. John McCain (R-Ariz.), the Commerce Committee chairman who ordered the GAO study, said McCain expects to see the office's findings in October. McCain's staff, meanwhile, is preparing draft legislation intended to give consumers greater choice in buying cable programming services.

Cohen indicated that Comcast and perhaps the broader cable industry won't let a damaging GAO report go unanswered.

Taking the offensive

"I think in the past, people have been almost defensive in talking about this issue. I think we can play some defense, but I also think we can play some offense," Cohen said. "The industry needs to do a better job of expressing the value proposition that cable brings to the table."

At the FCC, cable is fighting the NAB, which wants mandatory carriage of analog and digital broadcast-television signals during the transition to DTV, and of all the free programming services that TV stations offer — maybe as many as six separate channels — after the transition.

The FCC is reportedly putting the final touches on major broadband policies, which are likely to decide whether cable and phone companies are required to sell access to competing Internet-service providers or abide by nondiscrimination rules, under which MSOs could not use their network control to benefit affiliates or harm Web content providers and merchants that do not have business agreements with broadband operators.

Comcast has its eye on the local phone business, having inherited 1.4 million phone customers from AT&T Broadband. Along with Cablevision Systems Corp. and Time Warner Cable, Comcast is taking a serious look at voice-over-Internet protocol as the most cost-efficient method to deliver telephony over broadband facilities. The FCC, however, has not classified the service. When it does, it will largely spell out the regulatory burdens associated with VoIP.

There are plenty of people in Washington who intend to frustrate Comcast's effort to achieve a regulatory utopia for itself.

"[Comcast has] a huge political agenda. So it makes a lot of sense that they would be expanding their political resources," said Jeff Chester, executive director of the Center for Digital Democracy. "I think they are deluding themselves. If they think that just because they have a golden Rolodex that they are going to push folks around and dominate, they are wrong."

Chester's group has sued the FCC in federal court with the goal of requiring the agency to apply Internet open access conditions retroactively to the Comcast-AT&T merger approved almost one year ago.

NCTA collaboration

Comcast has no intention of fighting every battle alone. Despite talk of ongoing friction between the top MSO and the National Cable & Telecommunications Association, Cohen insisted the two cooperate and, in fact, rely on each other.

"We have a very strong and close relationship with NCTA and with [president] Robert [Sachs] and [executive vice president] David [Krone]," Cohen said. "One of the first visits I made when I came to this company was to go down and talk to Robert and solicit his advice about what our Washington office should look like."

Comcast and the NCTA, Cohen added, are not destined to be the lead voices on every issue. He noted that Insight Communications Co. CEO Michael Willner stepped forward last year on industry accounting issues to placate Wall Street investors.

"My analogy is that it is almost like a bike race," Cohen said. "Two bikes in the front of the race and the rest of industry riding in the draft of those two riders, with every once in a while someone being called upon in the industry to come out from the pack and to lead the race for a while."

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