COMPETITION IN THE MEDIA AND ENTERTAINMENT DISTRIBUTION MARKET HEARING BEFORE THE COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS SECOND SESSION FEBRUARY 25, 2010 Serial No. 111–121 Printed for the use of the Committee on the Judiciary ( Available via the World Wide Web: http://judiciary.house.gov U.S. GOVERNMENT PRINTING OFFICE 55–068 PDF WASHINGTON : 2010 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Aug 31 2005 12:53 Nov 10, 2010 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 H:\WORK\FULL\022510\55068.000 HJUD1 PsN: DOUGA COMMITTEE ON THE JUDICIARY JOHN CONYERS, JR., Michigan, Chairman HOWARD L. BERMAN, California LAMAR SMITH, Texas RICK BOUCHER, Virginia F. JAMES SENSENBRENNER, JR., JERROLD NADLER, New York Wisconsin ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia HOWARD COBLE, North Carolina MELVIN L. WATT, North Carolina ELTON GALLEGLY, California ZOE LOFGREN, California BOB GOODLATTE, Virginia SHEILA JACKSON LEE, Texas DANIEL E. LUNGREN, California MAXINE WATERS, California DARRELL E. ISSA, California WILLIAM D. DELAHUNT, Massachusetts J. RANDY FORBES, Virginia STEVE COHEN, Tennessee STEVE KING, Iowa HENRY C. ‘‘HANK’’ JOHNSON, JR., TRENT FRANKS, Arizona Georgia LOUIE GOHMERT, Texas PEDRO PIERLUISI, Puerto Rico JIM JORDAN, Ohio MIKE QUIGLEY, Illinois TED POE, Texas JUDY CHU, California JASON CHAFFETZ, Utah LUIS V. GUTIERREZ, Illinois TOM ROONEY, Florida TAMMY BALDWIN, Wisconsin GREGG HARPER, Mississippi CHARLES A. GONZALEZ, Texas ANTHONY D. WEINER, New York ADAM B. SCHIFF, California LINDA T. SA´ NCHEZ, California DEBBIE WASSERMAN SCHULTZ, Florida DANIEL MAFFEI, New York [Vacant] PERRY APELBAUM, Majority Staff Director and Chief Counsel SEAN MCLAUGHLIN, Minority Chief of Staff and General Counsel (II) VerDate Aug 31 2005 12:53 Nov 10, 2010 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 H:\WORK\FULL\022510\55068.000 HJUD1 PsN: DOUGA C O N T E N T S FEBRUARY 25, 2010 Page OPENING STATEMENTS The Honorable John Conyers, Jr., a Representative in Congress from the State of Michigan, and Chairman, Committee on the Judiciary ..................... 1 The Honorable Lamar Smith, a Representative in Congress from the State of Texas, and Ranking Member, Committee on the Judiciary ......................... 5 The Honorable Zoe Lofgren, a Representative in Congress from the State of California, and Member, Committee on the Judiciary ................................. 7 The Honorable Gregg Harper, a Representative in Congress from the State of Mississippi, and Member, Committee on the Judiciary ............................... 7 The Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Georgia, and Member, Committee on the Judiciary ............ 7 The Honorable Adam B. Schiff, a Representative in Congress from the State of California, and Member, Committee on the Judiciary ................................. 8 WITNESSES Mr. Brian L. Roberts, Chairman and CEO, Comcast Corporation, Philadel- phia, PA Oral Testimony ..................................................................................................... 9 Joint Prepared Statement ................................................................................... 13 Mr. Jeff Zucker, President and CEO, NBC Universal, New York, NY Oral Testimony ..................................................................................................... 10 Joint Prepared Statement ................................................................................... 13 Ms. Jean Prewitt, President and CEO, Independent Film and Television Alliance, Los Angeles, CA Oral Testimony ..................................................................................................... 29 Prepared Statement ............................................................................................. 31 Mr. Thomas W. Hazlett, Professor of Law and Economics, George Mason University School of Law, Arlington, VA Oral Testimony ..................................................................................................... 38 Prepared Statement ............................................................................................. 40 Dr. Mark Cooper, Ph.D., Director of Research, Consumer Federation of Amer- ica, Washington, DC Oral Testimony ..................................................................................................... 43 Prepared Statement ............................................................................................. 45 Mr. Larry Cohen, President, Communications Workers of America, Wash- ington, DC Oral Testimony ..................................................................................................... 58 Prepared Statement ............................................................................................. 59 Mr. Andrew Jay Schwartzman, President and CEO, Media Access Project, Washington, DC Oral Testimony ..................................................................................................... 72 Prepared Statement ............................................................................................. 74 Mr. Marc H. Morial, President and CEO, National Urban League, New York, NY Oral Testimony ..................................................................................................... 82 Prepared Statement ............................................................................................. 84 (III) VerDate Aug 31 2005 12:53 Nov 10, 2010 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 H:\WORK\FULL\022510\55068.000 HJUD1 PsN: DOUGA IV Page LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING Prepared Statement of the Honorable John Conyers, Jr., a Representative in Congress from the State of Michigan, and Chairman, Committee on the Judiciary ......................................................................................................... 3 APPENDIX Material Submitted for the Hearing Record .......................................................... 151 VerDate Aug 31 2005 12:53 Nov 10, 2010 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 H:\WORK\FULL\022510\55068.000 HJUD1 PsN: DOUGA COMPETITION IN THE MEDIA AND ENTERTAINMENT DISTRIBUTION MARKET THURSDAY, FEBRUARY 25, 2010 HOUSE OF REPRESENTATIVES, COMMITTEE ON THE JUDICIARY, Washington, DC. The Committee met, pursuant to notice, at 10:04 a.m., in room 2141, Rayburn House Office Building, the Honorable John Conyers, Jr. (Chairman of the Committee) presiding. Present: Representatives Conyers, Berman, Nadler, Lofgren, Jackson Lee, Waters, Cohen, Johnson, Pierluisi, Quigley, Chu, Gutierrez, Gonzalez, Wiener, Schiff, Sa´nchez, Maffei, Smith, Sen- senbrenner, Coble, Goodlatte, Lungren, Issa, Forbes, Franks, Gohmert, Poe, Chaffetz, Rooney, and Harper. Staff present: (Majority) Perry Apelbaum, Staff Director and Chief Counsel; Christel Sheppard, Counsel; (Minority) Sean McLaughlin, Chief of Staff and General Counsel; and Stewart Jeffries, Counsel. Mr. CONYERS. The Committee will come to order. We are in a difficult situation in terms of our economy. We are coming out of a financial crisis that was triggered by the prime mortgage—subprime mortgage meltdown. We have invested over $1.5 trillion in the economy, finally turning toward creation of jobs. I remember that since the Clinton administration, there has been consolidation, takeover and mergers unparalleled in American eco- nomic history, only slightly down-turned in number and scope over the last several years. And I must say that I have always been alarmed about these combinations that have developed in our econ- omy. I have never thought that the antitrust division had operated with any real effectiveness. And I start off this discussion this morning with the suspicion that there are cases in which vertical mergers can be more dan- gerous than horizontal mergers and that the role of the Internet and—versus the role of cable is something we have got to begin to look at on a far larger basis than the one proposed merger before this Committee this morning. And, of course, I have never yet entertained a merger discussion in which there was complete assurance that there would be no dim- inution of jobs, never. And never has that ever happened. There was always job loss. There are now places in Michigan in which 30 percent of its pop- ulation is unemployed. There are places that would meet the defi- nition of a depression before the crisis that caused so much angst. (1) VerDate Aug 31 2005 12:53 Nov 10, 2010 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6601 H:\WORK\FULL\022510\55068.000 HJUD1 PsN: DOUGA 2 And now we have a proposal before us that I am approaching very carefully. And I will put my statement in the record, make it available, and I would like our Ranking Member, who has worked with me more closely and in a way without compromising his own point of view, but where he and I and this Committee could reach agreement as we did with the considerations that were on the floor just last night. I wanted to thank him and the Committee for the close scrutiny that we gave each other’s approach to these very important prob- lems. And I recognize Mr. Smith of Texas, the Ranking Member. [The prepared statement of Mr. Conyers follows:] VerDate Aug 31 2005 12:53 Nov 10, 2010 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6601 H:\WORK\FULL\022510\55068.000 HJUD1