If regulators believe they can turn Comcast and Time Warner Cable’s mega-merger into a consumer-friendly deal in the public interest, they are ignoring history.

No matter what conditions regulators place on Comcast to approve its merger with Time Warner Cable, they will be toothless, television industry insiders told the New York Post.

Insiders suggest the Federal Communications Commission has been largely impotent enforcing conditions it required in earlier merger deals, including those Comcast promised to fulfill in its earlier merger with NBC Universal.

Among Comcast’s broken promises cited by The Post:

• Comcast failed to live up to its promise to market its low-cost broadband service, Sen. Al Franken (D-Minn.), an outspoken critic of the NBCU deal, told the FCC earlier this year;
• Comcast paid a fine for not marketing A standalone $50 broadband service widely enough;
• The giant cable provider’s hollow commitment to Net Neutrality didn’t stop it from excluding certain XFINITY video content from its data caps;
• They discriminate against non-Comcast owned cable channels, especially those that compete with network Comcast owns or controls. Examples include The Tennis Channel and Bloomberg TV.

Industry insiders claim the larger Comcast gets, the more the company spends on clever lawyering and lobbying to keep itself out of legal hot water with Congress and regulators. That has begun to worry programmers like Discovery Communications, who filed objections to the merger deal.

Discovery officials warned the FCC Comcast’s takeover of Time Warner Cable would deliver an NSA-like treasure trove of viewer data to the nation’s biggest cable company. Comcast already monitors its customers’ viewing habits with tracking software installed inside set-top boxes that monitors what customers are watching at any given time. Comcast has refused to share that data with outsiders, and uses it primarily to pitch potential advertisers.

Comcast’s size already gives the company unprecedented power over cable programming rates during negotiations. Making the company even larger worries Discovery, which expressed concern that:

• Comcast’s use of its bigger muscle to impose prices, terms and conditions that are overly favorable (for instance, preventing programmers from selling over-the-top rights or refusing to give competitors to its own services wide distribution);
• The possibility that the cable giant could impose broader “most favored nation” clauses in agreements;
• That Comcast could exercise control over national and local ad sales markets to the detriment of programers who also compete there.

Assemblyman Joe Morelle’s letter to N.Y. regulators failed this online plagiarism checker when it found the majority of the text was lifted from Comcast’s own press statements and congressional testimony, without attribution.

News that Assemblyman Joe Morelle cut and pasted the majority of his letter to New York regulators directly from a Comcast press release and executive testimony before Congress has begun to create some problems for the assemblyman and his office.

The story has been picked up by a Rochester television station, two New York newspapers and the National Journal (so far). We have now learned that Assemblyman Morelle also cashed a $1,000 campaign contribution check from Comcast earlier this year.

In response to our story, the assemblyman’s office today issued a litany of excuses about why it now fronts for Comcast, none of them particularly convincing. In fact, the damage control effort may actually be making the problems for Mr. Morelle and Comcast worse:

WROC-TV:

Sean Hart, said Comcast approached the assemblyman for his support. “They provided a draft letter of support for our consideration. We made several edits of the letter. This is common practice for any organization asking for an elected official’s support to provide a sample letter.”

Comcast is not an “organization.” It is a multi-billion dollar telecommunications and entertainment conglomerate. We are grateful to have confirmation that Comcast is sending out “templates” to elected officials with talking points already prepared and ready to go. The only issue is whether an elected official will steer clear of promoting giant corporate merger deals they don’t understand (and Mr. Morelle clearly does not have a clue.)

Did Mr. Morelle consult with his own constituents before deciding to tote water for Comcast? Not that we are aware of. Even the Public Service Commission’s own staff recognizes the overwhelming majority of New Yorkers communicating with them on this issue (nearly 3,000 and counting), are vehemently opposed to the deal. Many have past personal experiences dealing with Comcast, and they don’t have the benefit of a $1,000 check from the cable company to give them warm feelings of goodwill.

Although it may be common practice for a company to do this kind of advocacy work, it is not common for most elected officials to barely rewrite the company’s own press releases and executive testimony. Out of thousands of elected officials in New York, only a dozen or so have weighed in with the PSC on this issue.

Our favorite attempt at damage control came from Mr. Hart’s comments to The Journal News:

“It is common practice for an organization seeking support to provide a sample letter with suggested language,” Hart wrote. “I am certain if you were to review letters of support for any number of projects/causes submitted by elected officials, at every level of government, you would find that many opt to extract language from a sample letter provided to them.”

Hart rejected the suggestion that Morelle plagiarized the Comcast and Time Warner executives’ testimony, as suggested by Stop the Cap. The letter to the Public Service Commission was signed by Morelle and printed on official Assembly letterhead.

“I realize I probably do not need to point this out to a journalist, but the definition of plagiarism is ‘an act or instance of using or closely imitating the language and thoughts of another author without authorization and the representation of that author’s work as one’s own,'” Hart wrote. “Morelle has authorization from Comcast to use the language included in his letter to the NYSPSC.”

He continued: “It is one thing to disagree with the Majority Leader’s opinion. It is another to make outlandish claims that lack merit.”

Morelle

We have reviewed over 8,000 comments filed with regulators on the state and national level since 2008. We have rarely encountered a cut and paste job as obvious as Mr. Morelle’s letter. When you review as many filings as we do, when talking points are quoted word for word, it stands out because we have heard them from Comcast again and again.

Mr. Hart does not help Mr. Morelle’s cause defending the fact he had Comcast’s permission to cut and paste their press releases in comments sent on the Majority Leader’s letterhead and signed by him personally. Comcast could and should have co-signed it. The fact that it happened at all should ring alarm bells for any voter, particularly those who don’t appreciate an elected official inviting America’s most-hated cable company into New York State.

As for the matter of plagiarism, perhaps we missed the part where Mr. Morelle made sure to credit the source for his testimonial. Oh wait, we didn’t. It wasn’t in there. Would Mr. Hart’s excuses fly by your college professor after being caught cutting and pasting someone else’s words in a paper you ostensibly wrote without any attribution?

Maybe we were wrong, so we decided to run Mr. Morelle’s letter through an online plagiarism checker to see what it thought.

Uh oh: Grammarly not only fired off a warning, but a full-scale “!” plagiarism alert, even after we discounted our own (and others) coverage of the story, which also quotes from his letter.

If Mr. Hart wants to attack us for exposing the sordid affair, we’re fine with that. We’re tough and can take it. He’ll find few (unpaid) defenders of Comcast to stand with the assemblyman.

Frankly, the only “outlandish claims that lack merit” are Comcast’s promises for New York. If Mr. Morelle is that comfortable extending his own credibility to vouch for Comcast, we’ll still be around to remind his constituents the promised dreams of better days inevitably devolved into a consumer nightmare, just as it has in Comcast’s primary service areas. Voters should know Comcast has Joe Morelle’s full and unwavering support.

The best damage control? Rescind the letter. All will be forgiven. Mr. Morelle won’t be the first (or last) elected official suffering collateral damage from Comcast.

If your non-profit or civil rights group has or is thinking of writing a glowing letter in favor of the merger of Comcast and Time Warner Cable, Stop the Cap! is delighted to announce our new Alert Your Donor Base service. Each time we discover a letter submitted to a state or federal regulator announcing your enthusiastic support for the Worst Company in America marrying the second worst, we’ll be sharing that exciting news, along with any contributions we discover Comcast has sent your way, to your members and supporters.

We were surprised to learn that so many non-profit and civil rights groups don’t seem to publicize their sudden fascination with Comcast’s growth agenda. Perhaps it is an oversight. But that’s no problem. We’ll make sure the news lands on your Facebook page, Twitter feed, and your local media outlets. You have nothing to be ashamed about, right?

If donors decide that Comcast has evidently given your group so much support you feel somehow obligated to divert your attention away from your core mission to write a Hallmark Card in favor of $45 billion corporate merger deals, that’s important news for them to know. Perhaps donors will decide it is safe to direct their contributions to the groups that are dedicated to helping real people, not multibillion dollar cable companies.

It’s the least we could do.

Here’s a sample:

Dear Carlisle Hope Station:

For the benefit of your donors, we’d like to share your exciting news that the Carlisle Hope Station of Carlisle, Pa. took valuable time out of its day to send a letter of support for Comcast’s $45 billion merger deal with Time Warner Cable. This merger will have no impact on your group or its constituency because Comcast is already your local cable company. You decided it was best for New Yorkers to also enjoy cable service from the 2014 winner of the Worst Company in America award.

We pondered why your charitable group would spend time, money, and resources on a letter writing campaign for multi-billion dollar corporation. Then we discovered Comcast is a Platinum Donor, contributing more than $10,000 in in-kind/real contributions to your organization. Since Comcast has so generously donated to your effort, perhaps there are other local needy organizations that could do with some donations — ones that don’t have time to write letters to out-of-state regulators about cable company mergers.

Yours very truly,

Stop the Cap!

All of these media and content companies may be up for grabs.

Could Rupert Murdoch become the next owner of CNN? Will Verizon consider buying out the owner of more than a dozen cable networks, or the Walt Disney Company, owner of ABC?

Since 1983, media moguls have assembled annually in posh Sun Valley, Idaho to talk business. But never have they met while several huge consolidation and merger deals are on the table among their colleagues. Comcast acquiring Time Warner Cable and AT&T buying out DirecTV are both seen as game-changers among Wall Street bankers and the media elite, leaving many self-consciously pondering whether they are no longer big enough to stay competitive in a consolidated media world.

The Wall Street Journal and the Atlanta Journal-Constitution both report that at least one huge merger deal could emerge as a result of this week’s conference. Among the most likely buyers is FOX CEO Rupert Murdoch, who is reportedly looking to buy a major content company.

The most likely target is Time Warner (Entertainment), former owner of Time Warner Cable. After spinning off its money-losing magazine unit, TW has become much more focused on content and distribution – exactly what Murdoch is looking for. Time Warner owns New Line Cinema, HBO, Turner Broadcasting System, The CW Television Network, Warner Bros., Kids’ WB, Cartoon Network, Boomerang, Adult Swim, CNN, DC Comics, Warner Bros. Animation, Cartoon Network Studios, Hanna-Barbera, MLB Network and Castle Rock Entertainment. In fact, altogether the company owns or controls dozens of television channels which could all soon fall into the hands of Murdoch.

A Murdoch acquisition would be the last death-blow for Ted Turner’s Turner Broadcasting System, which launched CNN, TBS, and TNT and is now a division within Time Warner. Murdoch’s Fox News Channel was launched as a conservative alternative to CNN’s perceived left-leaning reporting. A Murdoch buyout would either deliver bipartisan profits to the media mogul or allow him to shut down the network or relaunch it under the Fox News brand.

Such an acquisition would not be cheap. Time Warner is worth as estimated $62 billion.

A Murdoch buyout would be especially troublesome for those already upset with corporate media consolidation. Murdoch would end up controlling three major U.S. networks – FOX, CW, and MyNetworkTV, multiple cable news channels, dozens of local television stations in major media markets, and more cable networks than most people can count. In fact, the assembled list of Murdoch-owned media properties is enormous:

Murdoch: The next owner of CNN?

Adult Swim, Boomerang, Cartoon Network, CNN Worldwide, HLN, Inside CNN Tour & Store, TBS, TCM, TheSmokingGun.com, TNT, truTV, Turner Sports, Fox Business Network, Fox News, Star India, YES Network, Twentieth Century Fox, Fox 2000 Pictures, Fox Searchlight Pictures, Fox International Productions, Twentieth Century Fox Television, Fox Home Entertainment, Shine Group, Twentieth Century Fox Animation, The Sun, The Times, The Sunday Times, Times Literary Supplement, The Wall Street Journal, The New York Post, The Australian, The Daily Telegraph (Australia), The Sunday Telegraph (Australia), The Herald Sun, The Sunday Herald Sun, The Courier Mail, The Sunday Mail, The Advertiser, NT News, The Sunday Territorian, The Sunday Times (Australia), The Sunday Tasmanian, Mercury, Warner Bros. Pictures, Warner Bros. Pictures International, New Line Cinema, Warner Home Video, Warner Bros. Advanced Digital Services, Warner Bros. Interactive Entertainment, Warner Bros. Technical Operations, Warner Bros. Anti-Piracy Operations, Warner Bros. Television Group, Warner Bros. Television, Telepictures Productions, Warner Horizon Television, Warner Bros. Animation, Warner Bros. Domestic Television Distribution, Warner Bros. International Television Distribution, Warner Bros. International Television Production, Warner Bros. International Branded Services, Studio 2.0, The CW Television Network, DC Entertainment, Warner Bros. Theatre Ventures, HarperCollins General Books Group, HarperCollins Children’s Books Group, HarperCollins Christian Publishers, HarperCollins UK, HarperCollins Canada, HarperCollins Australia/New Zealand, HarperCollins India, FX, FXX, FXM, National Geographic Channel, Nat Geo WILD, Nat Geo Mundo, FSN, FOX Sports 1, FOX Sports 2, FOX Soccer Plus, FOX College Sports, FOX Deportes, FOX Life, Baby TV, Fox Broadcasting Company, Sky 1, Sky Atlantic, Sky Living, Sky Arts, Sky Sports, Sky Movies, Sky News, Sky Deutschland, Sky Italia, MyNetworkTV, MundoFox, FOX International Channels, Fox Sports Enterprises, HBO, HBO On Demand, HBO GO, Cinemax, Cinemax on Demand, MAX GO, HBO2, HBO Signature, HBO Family, HBO Comedy, HBO Zone, HBO Latino, More Max, Action Max, Thriller Max, 5 Star Max, Max Latino, Outer Max, Movie Max, Barron’s, MarketWatch, Factiva, Dow Jones Risk & Compliance, Dow Jones VentureSource, All Things Digital, Amplify, News America Marketing, and Storyful.

Murdoch has already shown a willingness to spend big. He has recently taken an ownership interest in the up and coming Vice Media, popular with the under 30-viewing crowd. He also spent $415 million to buy romance novel publisher Harlequin Enterprises.

But Murdoch may not be the only one shopping for a deal. The Wall Street Journal offered a shopping list:

• Small cable network owners: Nobody just owns three or four cable networks these days. Content conglomerates like CBS, Disney, Time Warner and Comcast own 15, 30, or even 40 different channels. Smaller players are ripe for the picking. Chief among them include Scripps Networks Interactive (Food Network, HGTV), AMC Networks (AMC, IFC, Sundance), and Crown Media (Hallmark).
• Small studios: Owning a small Hollywood studio is quaint, but Wall Street investment bankers think the time is long past to sell out to larger corporate entities who can better leverage distribution of their releases, easy enough if you own your own theater chain, pay cable network, broadcast stations, and basic cable outlets.

Both phone companies are attending Sun Valley for the first time.

In addition to buyout offers from the largest networks around, Discovery Networks is also in the mood to grow larger at the urging of its board of directors, which includes Dr. John Malone, CEO of Liberty Global. Malone is behind much of the cheerleading to consolidate the cable industry and helped spark the Comcast-Time Warner Cable deal when his partly owned Charter Communications sought a takeover of Time Warner Cable itself.

Wall Street bankers love even better the idea of selling Discovery to a new owner – Disney.

For the first time, phone companies AT&T and Verizon are also in attendance at Sun Valley, and analysts don’t believe the CEOs are there for summer vacation.

Jimmy Schaeffler, chairman of media and telecom consulting firm Carmel Group, says Verizon has been most lacking in the content ownership department and “needs something else right now” as rivals bulk up. AT&T’s acquisition of DirecTV only underlines that sentiment among many Wall Street analysts who think Time Warner (Entertainment) could be an option if Verizon isn’t outbid by Murdoch.

All of this shopping has caused alarm for some, including CNN’s media reporter Brian Stelter who declared, “I will eat my remote control … in fact, I will eat my copy of the New York Post … if Murdoch becomes the owner of CNN.” 

[flv]http://www.phillipdampier.com/video/WSJ Digits Media Consolidation 7-7-14.flv[/flv]

The Wall Street Journal’s ‘Digits’ explores the ongoing consolidation of media creators and distributors. This year’s media conference in Sun Valley could spark more merger deals. (5:02)

The announced merger of Comcast and Time Warner Cable is expected to have far-reaching implications for other companies in the video and broadband business, with expectations 2014 could be one of the busiest years in a decade for telecom industry mergers and buyouts.

AT&T + DirecTV = Less Video Competition

Bloomberg News reports an announcement from AT&T that it intends to acquire DirecTV for as much as $50 billion could be forthcoming before Memorial Day. Such a merger would drop one satellite television competitor in AT&T landline service areas and promote nationwide bundling of AT&T wireless service with satellite television.

Historically low-interest rates would help AT&T finance such a deal and would turn DirecTV into a division of AT&T, easing concerns the satellite company has been at a disadvantage because it lacks a broadband and phone package.

“While the Comcast/TWC deal was the trigger, the backdrop of a slow macro economy, new competitors, shifts in technology and consumer habits all come together and force the need for more scale,” Todd Lowenstein, a fund manager at Highmark Capital Management Inc. in Los Angeles told Bloomberg.

Satellite television companies remain technologically disadvantaged to withstand the growing influence of online video and their subscriber numbers have peaked.

If AT&T buys DirecTV, the wireless giant could theoretically bundle its service with DirecTV’s video product, and in some areas of the country its U-verse high-speed broadband to the home, to compete with cable, said Amy Yong, an analyst at Macquarie Group in New York, in a note to clients.

Sprint + T-Mobile = Less Wireless Competition

Dish + T-Mobile = A Draw

In a less likely deal Sprint is still trying to pursue T-Mobile USA for a potential merger and if regulators reject that idea, Charles Ergen’s Dish Network is said to be interested.

To prepare Washington for another telecommunications deal, SoftBank founder Masayoshi Son’s lobbying firm, Carmen Group, has again been meeting with elected officials and regulators to argue the merits of a merger with T-Mobile, according to a person familiar with the matter.

Dish, which failed to buy Sprint last year, would be interested in acquiring T-Mobile if regulators block Sprint’s efforts, Ergen said. That hinges on whether SoftBank Corp. fails to win regulatory approval for its plan to buy T-Mobile, which is controlled by Deutsche Telekom AG, Ergen said last week. The Japanese wireless company owns 80 percent of Sprint.

All three deals carry a combined value of $170 billion in equity and debt and would impact 80 million Americans.

Suitors hope regulators will be in the mood to approve merger deals as they contemplate enlarging Comcast through its purchase of Time Warner Cable.

Even if all the deals don’t pass muster, Wall Street banks will still rake in millions in fees advising players on how to structure the deals. Goldman Sachs and J.P. Morgan would join executives winning considerable sums for reducing the number of competitors providing telecommunications services in the U.S.

Whether customers would benefit is a question open to much debate.