Associations whose members serve subscribers in small rural markets. Prior to joining the association, he was Vice President and general counsel for star cable so see its. Associates. He received his jd from pacific Pittsburgh University school of law. He was recipient of the law schools most distinguished graduate award. Welcome. Our next waste this witness of columbia law school. He is a law professor where his Research Examines the balance between innovation and competition set i antitrust law, it intellectual property, and other forms of regulation. From 20112012, he served as chief of the antitrust bureau in the office of new York State Attorney general. Before joining columbias faculty, he served as a law clerk. On the u. S. Court of appeals for the seventh circuit. And to Justice Scalia on the Supreme Court. He is a graduate of Harvard College in the heart London School of economics. He studied as a fulbright scholar. We welcome you, professor. Our next witness was mr. Alan, an antitrust lawyer at the law firm he advises on mergers and acquisitions, provides counsel on nonmerger matters, and prior to joining the law firm, he spent more than one decade at the United States department of justice and had justice antitrust division. He led many investigations in Industries Including radio, television, and motion pictures. He received his ba from Dartmouth College and received his jd from Rutgers Camden school law. He holds a degree from new york university. The next witness is mr. Patrick. He is founder and chairman of rural media group, inc. , the largest provider of multimedia content dedicated to rural and western lifestyle. He doesnt wear a tie. His representative asked if he should. We said we wanted him in his natural state. [laughter] if you are saying he does not have a tie on, it is the prerogative of the chairman. Thank you. Rural media group is a Parent Company of a number of Multimedia Companies including rf dtv, the first 24hour Television Network dedicated to the needs and interests of Rural America. For that, he was director of sales for superior livestock auction. Prior to joining superior livestock, he was started a company in nebraska that introduced 2000 satellites to the midwest. Before that, he worked on the Chicago Mercantile Exchange as a commodity broker. He graduated from Sam Houston State University in huntsville, texas. We welcome you. Our next witness, david shafer. Schaeffer. He is founder of Cogent Communications group prior to joining cogent, he worked in a variety of businesses. Mr. Schaeffers business successes have allowed him to build management teams that he received a bs in physics from the university of maryland where he was also a phd candidate in economics. We welcome you. Our final witness is dr. Craig level its liebowitz. He founded deep field networks. He serves as ceo and president. Hes an expert on infrastructure and cyber threats. Prior to founding deep field, he served as chief scientist for Arbor Networks based in ann arbor. His research and work is used by more than 400 Service Providers and more than 70 of the internet backbone transit traffic comes from products perfected by his research. He also served as one of the original engineers for the nsf backbone. That is where the internet as we know originated. One of the six universities was that . He received his masters of science and engineering and phd from the university of michigan and his bachelors from the university of pennsylvania. We welcome you as our final witness. At this time, mr. Cohen, we welcome your testimony. The written testimony can be entered into the record in its entirety. I ask that you try to summarize shirts summarize your testimony and five minutes. There is no electrical shock if you go past that time. [laughter] dont take that as a traffic light. Mr. Cohen . Thank you chairman baucus. We appreciate the opportunity to discuss the substantial benefits that will arise from our merger with time warner. Over the last 50 years, comcast has grown from a small cable operator in tupelo mississippi into one of the most innovative media and technology companies. We are an american success story. In a nutshell, this transaction will give us the scale to invest more innovation and infrastructure so we can impede more effectively with our Larger National and global competitors, including the bells, dish tv, and others. When we invest, so to our competitors. At t has said that this transaction puts a heightened sense of urgency on competitors to invest more in their networks and improve services. The ultimate beneficiary of this enhanced competition and greater investment is the american consumer. Specifically, comcast will bring residential customers faster internet speeds, more programming choices, more robust wifi, and our x1 operating system. Business customers will expand. It has connected 1. 2 million americans to the internet, more than any program of its kind. We will expand many benefits. Including our commitment to diversity and an open internet. More investment. Faster speeds. Better technology. More americans connected. Even with these compelling benefits, we recognize that questions arise whenever to Big Companies combine. Let me address them briefly. Americans are benefiting from robust competition. 97 of the homes in america are in census tracts where at least three competitors offer fixed or mobile Broadband Services. 99 of American Homes have access to at least three multichannel video providers. Objectively, this transaction is very straightforward from an antitrust perspective. As Ranking Member johnson said, are two companies do not compete for custom errs anywhere. It is a fact that every customer will have the same choices among broadband and video providers after this transaction as before. Nor will comcast again undo power over programmers. Last week, we announced a transaction with charter to divest almost 4 million customers, thereby reducing the number of customers to approximately 29 million below 30 share of the multichannel audio subscriber multichannel video subscribers. The fcc has concluded that a 30 ownership cap was justified to prevent a single operator from wielding undue control over programmers. But the federal courts twice rejected that cap, saying no cable operator could exercise market power 30 . Nonetheless, we will remain below that level which is essentially the same share of the market we had after the at t broadband and adelphia transactions. We keep our promises and play fair. Since the transaction, we have successfully negotiated dozens of agreements with for carriage of Nbc Universal content without withholding content from consumers and no arbitrations have been meted under the provisions. We also playfair in the exchange of internet traffic or what are sometimes called interconnections. The two markets should not be analytically conflated as some will do. We have successfully negotiated very common business arrangements with thousands of companies that connect to our network, including direct interconnection agreements with content providers such as comcast. Other isps do the same thing. The interconnection market is fiercely competitive with dozens of substantial players. Evidenced by the fact that prices have plummeted in that market by 99 over the last 15 years. Nothing in this transaction will affect the competitiveness of that market. Comcast wants to bring more investment in technology and new services to more American Homes and businesses. Doing so will incentivize our competitors to invest more, which will benefit more consumers. We have a track record as a fair competitor and a company that over delivers on its promises. Thank you for the opportunity to appear. Mr. Marcus, you are recognized. Thank you. Ranking member, chairman baucus. Members of the committee. I have appreciate the opportunity to testify. I agree that the company should of our two companies will create a Dynamic Company week for the 21st century poised for the 21st century. This transaction will give the combined companies greater scale, which will drive investment in r d, infrastructure, software, and talent. Which will bring more consumers nextgeneration technologies, or secure and reliable networks, faster broadband speeds, enhanced video and voice beads. The commendation of the companies will bring Competitive Choices to business cards customers. Not only will emerge are driving investment and innovation, it will also drive investment and innovation from competitors. Consumers will be the beneficiaries. As david explained, this transaction will achieve these benefits without reducing competition in any way. Comcast and Time Warner Cable served distinct geographic areas. To bclear, consumers will have the same choices of providers after transaction as before. The video, broadband, and voice businesses have never been more competitive. In every market, consumers have at least three and in many cases four or more choices. For many years, the satellite providers, directv and dish, have offered video nationwide. Verizon and at t now offer video and a significant portion of our footprint. Google has announced video and has expanded announced plans to expand. Smaller players offer competing services. There are an increasing number of national providers. Including netflix, with over 33 million customers. Google video websites come which attract 157 million unique visitors each month. Because of this increase in competition, programmers have more options for reaching consumers than ever before. Time warner cable and Comcast Kerry scores of independent programming networks. As for larger programmers, their ability to impose price increases every year demonstrates their extraordinary bargaining leverage. Costs will rise 10 this year. I have no doubt that large programmers will continue to negotiate from a position of strength after the transaction. Like video, broadband markets are dynamic. Cable faces competition from large players. Google fiber. Mobile wireless Broadband Services. Recent announcements by both at t and google underscore how quickly this marketplace is evolving. Just last month, at t named 100 candidate cities for broadband speeds up to one gigabyte per second. Google announced it has targeted cities for its service. Mobile is becoming an alternative to broadband. The market for voice is also flush with competition. With landline, mobile, and a number of over the top services such as skype. As new entrants into the voice business, we have contributed to the competitiveness of this market and will continue to do so as a combined company. This transaction will increase to new and enhanced competition. Services have been dominated by incumbents such as at t which leverage their scale and scope. Time warner cable has gained a foothold, especially with mall and mediumsized businesses. Our ability to compete effectively in the business of serving larger regional businesses has been constrained. This transaction will boost competition for commercial services by giving the company greater scale, a broader footprint, and efficiencies necessary to meet the needs of business customers. Especially superregional enterprises. In summary, the dynamic and ever evolving marketplace presents challenges and opportunities. Enabling the new comcast to compete with greater scale will yield better competition and benefits for consumers and businesses. Thank you for the opportunity to testify. Thank you, mr. Marcus. Let me say this. The heat was on in here when i arrived. I have asked them to turn on the air conditioner, which i understand is now kicked on. But if any of the witnesses, particularly if you have completed your testimony, or prior to giving your testimony, if you want to take off your coat, you may save yourself a lot of shine. [laughter] i would invite and encourage anyone who wants to do that to do that. Yellow great you all look great, but as this wears on thank you, mr. Chairman. This is a hotter hotseat then normal. That was not intended. I think mr. Issa sometimes turns it up, but we do not do that on this committee. It is not stress. It is hot in here. Thank you, sir. The proposed combination of comcast and Time Warner Cable with later divestitures and swaps is a big deal. The singular point that i want you to know is this is a complicated deal that will negatively impact your constituents. Unless the fcc it should not be approved. To begin with, it is important to realize that comcast is more than just the largest paytv provider. It is a large programmer through its ownership of nbc, 10 nbc owned and operated stations, 13 Regional Sports networks, and many Popular National networks. Time warner cable is also a large cable operator and a large programmer through its ownership and control of 16 Regional Sports networks, including those in new york and los angeles. I wish i could simplify this deal into a single component to read the fact is there are three separate elements to consider. First, the combination of the two companies programming. Second, the combination of comcast ramming with the new comcast programming with the new Cable Systems. Third, the combination of the Cable Systems. The first two are similar to the concerns about the Comcast Universal transaction that doj addressed through conditions. The third raises new and significant concerns not present in the comcast previous deal. Regarding the first component, by merging its programming with the Regional Sports networks and selling them in a bundle, comcast will gain greater Bargaining Power against all paytv providers in all regions where Time Warner Cables Regional Sports networks are carried. It will be syria severe in new york and los angeles where there is a television station and sports network. All consumers will be affected by this harm, and clipping many members. Including many aca members. There will be a disincentive it will do this by either withholding comcast programming during negotiation impasses, or by demanding higher prices for this programming. The competitive harm will not be limited to comcast paytv rivals. Many of these providers obtain their programming through the nctc, there will be an incentive to charge higher prices for programming. This will harm the 900 paytv providers that pay comcast through the buying group. Regarding the third component, they deny that it does not compete locally against them. However, this ignores the over video programmers. The merged entity will have about 30 of all paytv subscribers nationally. This level of market share has traditionally raise concerns with antitrust authorities. It will have greater market share because of the deal. As a result, it will become a musthave distribution outlet for national and regional programmers. In the short run, it will demand even larger volume discounts than rivals. Thereby weakening the rivals competitive positions. They may leverage their dominance to increase orchid chair in the video programming industry, ultimately reducing this industrys competitiveness. The final result will be higher prices and fewer choices for consumers. The arbitration conditions are designed to mitigate the first two conditions. Requiring them to abide by these conditions is insufficient because they are flawed. In particular, arbitration remains too expensive for smaller providers. Moreover, the conditions and completely describe how bargaining agents for smaller providers could avail themselves of the conditions. Lastly, the department of justice and fcc will need to fashion new remedies for the harm arising from combining distribution assets with distribution assets of Time Warner Cable and charter, which did not arise. The doj and sec have some Big Decisions ahead. We look forward to working closely with congress and the agencies as conditions are fashioned. Thank you very much. Thank you, mr. Polka. You are recognized. Mr. Chairman, Ranking Members. Thank you for the opportunity to testify about the antitrust invocations of the merger. As members have noted, a number of antitrust concerns have been raised. These concerns are generally based on mistaken analogies that dont generally apply. Critics have charged this merger is just like at t tmobile and can there be therefore be expected to raise prices. This is nothing like that. Suppose i want to buy a Wireless Service where i live in new york city. I can choose from at t, tmobile, or other providers. Take one of these away any remaining firms may be able to raise prices, which has the effect of squeezing consumers of the market. Compare that to video service. In west village, i could choose among time warner and other options. But comcast is not a choice, unless i am willing to move to philadelphia. Time warner does not compete anywhere. Nothing is lost by the competition. Critics offer a second technology. Clean that they are like a predatory grain barn fighting against farmers lets say the only two grain buyers in town and the two buyers merge, they have an opportunity to reduce purchases in order to depress the price. This merger is not