Comcast's growth produces an asset: Political clout
The Philadelphia Inquirer
July 6, 2003

Quoted: Manfred Ohrenstein

When the time came to launch Comcast Corp.'s high-definition television service in Chicago last month, it wasn't a company executive or a local celebrity holding the oversize remote control to "turn on" the service.

It was Michael Powell, chairman of the Federal Communications Commission, whose agency regulates important pieces of Comcast's business.

Should Powell - who was flanked by Comcast founder Ralph J. Roberts and chief executive officer Brian L. Roberts, among others - be participating in such a promotional photo opportunity?

"I think it's inappropriate for the chairman to go out and plug this," said Jeffrey Chester, executive director for the Center for Digital Democracy, a media watchdog group. "The public should be wary when Michael Powell comes and acts as a PR prop."

Powell, who did not respond directly to telephone calls and an e-mail requesting comment on the issue, said at the time: "We all needed to be a partner, and not an opponent," in the transition from today's analog television to tomorrow's digital system.

His participation in the event during the cable industry's annual convention was an indicator of how influential Comcast has become, in Washington as well as within its industry, since it bought AT&T Broadband in November and became the nation's largest cable operator.

The Philadelphia company bought itself gobs of goodwill with the FCC more than a year ago by embracing Powell's plan for the congressionally ordered changeover to digital TV. The cable industry, prodded by the FCC and led by Comcast, switched its development and marketing of high-definition TV service into overdrive and worked with traditional rivals to resolve crucial technical details.

David Fiske, an FCC spokesman, said there was nothing out of place about Powell's presence or comments at the Chicago event. Powell has at times chastised or praised many industry groups, including cable, for dragging their feet or making progress, respectively, on digital television.

The FCC's relationship with the industries it regulates has been called into question recently in Congress: A recent report said agency officials had accepted nearly $2.8 million in free trips to trade shows from industry groups over the last eight years, and a Senate bill introduced last month would ban the practice.

The National Cable and Telecommunications Association has routinely paid for FCC officials' attendance at industry events, according to the report by the Center for Public Integrity.

"[Powell's] involvement with various industry groups is behind his central belief that the digital migration is an essential telecommunications issue this century," Fiske said.

He said having industry groups pay for FCC trips to trade shows saved taxpayers' money; all such trips are approved by an ethics panel.

David L. Cohen, Comcast executive vice president, does not deny that certain business moves, such as answering Powell's call to action on digital television, "build us brownie points" with the regulators.

But, Cohen said, "we did it because we thought it was good business to do that." And he disagreed with any suggestion that Comcast's lobbying success with the commission or elsewhere derived from "personal relationships or a favor bank we're drawing on."

To ensure that its interests continue receiving the proper attention in Washington, Comcast has spent the last year bulking up its federal lobbying force. The most recent addition came last month with Melissa Maxfield, a Democratic Party operative who was formerly the director of the political-action committee of Senate Minority Leader Tom Daschle (D., S.D.).

In mid-June, Comcast sent 150 of its employees - government and community-affairs types - to meet with 250 Washington legislators over two days.

Their mission: Let the lawmakers know just how big a deal Comcast is in their own backyards. Armed with maps and charts, the Comcast folks gave the politicians customized summaries of how many people Comcast employs in their states and districts, how much the company invested in new equipment there, and how much it pays in state and local taxes, among other data.

Their subtler message: Legislators should leave well enough alone when it comes to regulating cable, a topic that flares up periodically as consumers complain of rising cable rates, spotty service, and monopoly behavior.

"The current regulatory structure has been a great success," Cohen said.

That structure came not by accident, however, but from strenuous cable lobbying, said Bunnie Reidel, executive director of the Washington-based Alliance for Community Media, a public-interest group.

Comcast, she said, is "really, really good at courting politicians and funding campaigns."

Cohen, who was the mayor's chief of staff in Ed Rendell's administration, was hired last year largely to augment Comcast's Washington efforts. Cohen said the beefier staff put Comcast closer to rival telecommunications firms who have more full-time lobbyists.

"You can't look at that and say, 'Look at them try and flex their muscles,' " Cohen said of the recent hirings, which have brought on four well-connected Beltway insiders since February, boosting Comcast's full-time Washington lobbying staff to five.

In 2002, Verizon Communications Inc. and its subsidiaries spent about $6.5 million, or 21/2 times as much as Comcast, on federal lobbying, according to Senate records. Verizon says it has 14 full-time Washington lobbyists.

For Comcast, stacking its senior lobbying staff with insiders from both parties is critical to warding off new laws on cable rates or competition. Furthermore, the company hopes to influence several decisions that are pending at the FCC, including limits on cable market share and an agreement that would allow manufacturers to combine digital set-top cable boxes with the television itself.

Besides Maxfield, Comcast's lobbyist hires this year were:

Jessica Wallace, who was an aide with influential Louisiana Republican W.J. "Billy" Tauzin's House Energy and Commerce Committee, which examines cable issues.

Brian Kelly, who has worked at the Electronics Industry Association, the Walt Disney Co., and the National Association of Broadcasters.

Kerry Knott, who helped build Microsoft Corp.'s Washington government-affairs unit in the wake of the Justice Department's antitrust case against that company, and who previously was chief of staff to House Majority Leader Dick Armey.

They joined James Coltharp, a six-year Comcast lobbying veteran who had worked at the FCC as an adviser and economist in the 1990s.

Chester said that with the hires, Comcast was seeking to quell congressional dissent over its business practices before any can take root. Choosing the right lobbyists, he said, is critical.

"How it works is, how well-connected you are... getting the right official to pick up the phone, [and] who gets a warm, fuzzy feeling when they speak to their former aide," Chester said.

"It's a cheap life insurance policy," he said. "They certainly learned from Microsoft, who got beat up when they weren't represented sufficiently."

Still, the new hires' political pedigrees are no guarantee of success with their old colleagues, sai/the proper attention in Washingtond Manfred Ohrenstein, a former New York state senator and a founding partner of Ohrenstein & Brown L.L.P. in New York.

"The consultant gives the business an ability to communicate with the decision makers," said Ohrenstein, whose firm has a government-affairs practice that operates in New York and Washington. "That doesn't mean you deliver the individual's vote, or support or opposition."

While the cable industry as a whole is represented in Washington by the National Cable and Telecommunications Association, Cohen said, the industry's and Comcast's interests are bolstered by having the industry leader take a more active lobbying role.

One of cable's biggest successes at the FCC came last year, when the agency ruled that cable providers who offer fast Internet service were not required to share their networks with competitors, nor must they pay local franchise taxes on the service.

"The FCC is giving cable operators an absolute free ride, a multibillion-dollar gift," Reidel said of that ruling.

The millions Comcast is now spending on lobbying leaves groups such as hers at a big disadvantage, she said.

"If you've got people up there all the time delivering that message, it's going to get through," Reidel said. "I'm running an organization with a $600,000 budget."