Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age (32 page)

The Washington onslaught thus began with an effort to convince commissioners and traditional interest groups (minorities and unions) that Comcast was a good corporate actor. The consumer advocacy groups Free Press, Consumers Union, and Consumer Federation of America complained that none of Comcast's advance “'concessions’ [were] meaningful commitments beyond what Comcast is already doing, is likely to do anyway, or is bound to do by law.”
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They were right: for all its largesse,
Comcast was not committing to lower prices for cable or high-speed Internet access, or to provide globally relevant Internet access to all Americans, or to open its networks to competitors. Conditions that would address the fundamental competition and social contract concerns raised by the transaction would have to come from the regulators. And that's what the main fight was about.

The Comcast lobbying story centers on David Cohen, Comcast's executive vice president of policy and the man who oversees its government relations office. Cohen is a likeable man with an unpretentious way of speaking. He has played an important role in the Democratic Party for a long time, and he is an irresistible force on behalf of Comcast. “If I had to negotiate with him, I'd be really worried,” one Hill staffer told me. “I believe David Cohen is the driving genius behind Comcast”—and Comcast must agree, since it pays him more than $10 million a year.
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He's a dynamo, a multitasker with as many as twenty people waiting to see him at any given time, a sender of e-mails at 5
A.M.
, a man of enormous energy, efficiency, and organization. He has thousands of names on his BlackBerry. Rhonda Cohen once told the
Philadelphia Inquirer
that she sees so little of her husband that “we've been married for 30 years, but in terms of time, we're still on our honeymoon.” The Cohens, who have two sons, met at Swarthmore, where she was editor of the school newspaper and he “slept half the day.”
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Things have changed.

According to
Philadelphia Magazine
, “he's so genial, and tends to speak to everyone in such pleasant baths of words—he's so naturally embracing—that it's easy to miss how purely competitive he is.” Indeed, Cohen is something of a street fighter; if a Hill staffer brings up issues that challenge his version of events he will bristle, turning from a diplomatic pussycat into a tiger. But above all he has discipline and control.
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In a sense, Cohen has been smoothing the way for the Comcast merger for his entire career. He is originally from New York, but he made his name in Pennsylvania Democratic politics. He has been described for years as the gateway to Pennsylvania politics and in 2010 was named by
Politics Magazine
as one of the “Top 10 Democrats” in the state. He was Philadelphia mayor Ed Rendell's enormously effective chief of staff from 1992 to 1997.
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Buzz Bissinger's
A Prayer for the City
(1998), based on four years of wide-open access to Cohen and Rendell, chronicled in adulatory terms Cohen's unflappable, almost unearthly ability to stay focused despite little sleep for months on end. Bissinger wrote that Cohen, “like Radar on M*A*S*H, had the ability to be in the right place well before anyone even knew there was a right place.”
¹⁴
The
Pennsylvania Report
, naming Cohen to its list of the seventy-five most influential figures in Pennsylvania politics in 2003, noted that “no one—in or out of government—is closer to Ed Rendell than Cohen. No major policy decision, personnel, political or other decision will be made without his imprimatur or veto.”
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When then-Governor Rendell held an impromptu press conference in May 2010 on the occasion of Arlen Specter's loss of his Senate seat, David Cohen—“Rendell's Karl Rove,” according to the
Philadelphia Inquirer
—was at his side.
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Cohen and Rendell turned Philadelphia around by focusing on waste in government spending; Cohen went from one department to the next, instructing managers to stick with the revenue they had and prioritize their spending. In the end, the Rendell-Cohen team balanced the budget, implemented major structural reforms, and rescued the city from financial oblivion. As Cohen said to Bissinger, they proved that “you could cut taxes, increase revenues, and operate the city reasonably and responsibly.”
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Cohen's influence on Rendell and Philadelphia continued after he left government in 1997. Less than a week after he departed the mayor's office to rejoin the prestigious Philadelphia law firm Ballard Spahr, Andrews & Ingersoll, he was asked by Mayor Rendell to co-chair, with Comcast's Brian Roberts, the city's effort to attract one of the 2000 party conventions to Philadelphia. The committee succeeded in bringing the Republicans.
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The entire convention was a hymn to Comcast branding; buttons reading “Welcome to Comcast Country,” with “Republican National Convention” in tiny print, were handed out to conventioneers, who met in the Comcast Arena near downtown Philadelphia; the arena was ringed with enormous letters spelling out “
WELCOME TO COMCAST COUNTRY
.”
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Cohen quickly became the go-to Democratic fundraiser in the state. He chaired the board of directors of the Greater Philadelphia Chamber of Commerce and the University of Pennsylvania's board of trustees, and served as an adviser or board member for the CEO Council for Growth, the
National Urban League, the National Council of La Raza, the Jewish Federation of Greater Philadelphia, the United Way of Southeastern Pennsylvania, and the Pennsylvania chapter of the American Red Cross. In 2008
PolitickerPA
ranked him second among the state's top fifty political power brokers.
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Comcast, a Ballard Spahr client, had also had a strong influence on Philadelphia politics. When the small cable company RCN applied in 1998 for a license to provide cable services in Philadelphia, Rendell openly derided the attempt. After the city council dragged out the process for two and a half years, RCN gave up and left town, saying that it had been forced to respond to “Comcast-scripted” questions. This is the same RCN, recall, that claimed that Comcast had bullied independent contractors in the Philadelphia area to keep them from working for RCN, had carried out an elaborate predatory pricing scheme, and had “demonstrated both the inclination and the wherewithal to use their market power to crush broadband competition in their local markets”—in short, that Comcast's ability “to choke off nascent broadband competition” was becoming “unstoppable.”
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Exclusive franchises had been illegal under federal law for years, but Philadelphia was and is Comcast country. The company poured money into Rendell's campaigns and into Philadelphia for a decade before RCN showed up, and the city and the mayor were grateful for Comcast's good works and millions of dollars. These same civic techniques would prove extremely effective during the 2010 merger discussions.

After leading Ballard Spahr for a little more than four years, during which time the firm had also hired Ed Rendell (who was running for governor at the time), Cohen left the firm to join Comcast in 2002 with a job invented specifically for him.
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As he describes it, as executive vice president for policy, he is part of a troika charting the company's strategic direction. All external and administrative functions report to him. But Cohen's ties with Rendell seem to have only strengthened since he left Rendell's side, making Rendell and Comcast close allies as well. Comcast's acquisition of NBC Universal, Governor Ed Rendell said, would mean more jobs in Philadelphia, where Comcast is headquartered. “The prestige is enormous,” he added. Asked if he expected the merger to encounter any federal regulatory hurdles, Rendell responded, “I have confidence in David
Cohen.” Not surprisingly, Rendell was expected to join the Comcast board when he left the governor's mansion in 2011. Even before he left public office, Comcast had the governor doing post-game analysis for Philadelphia Eagles games (Rendell donated the money to charity).
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Cohen's Democratic ties have grown during his time at Comcast. Cohen made about $180,000 in contributions to Democrats between 2006 and 2011, compared to $12,000 to Republicans, according to OpenSecrets.org. Cohen also personally helped raise more than $6 million for President Obama's election campaign in 2008; during the 2008 election cycle, Comcast's political action committee raised more than $2.5 million. At a fundraiser for then-Democratic senator Arlen Specter on September 15, 2009, just months before the Comcast merger was announced, President Obama called out the “luminaries” in the room—Governor Rendell, Mayor Michael Nutter of Philadelphia, various congressmen, and the chair of the Democratic State Party, T. J. Rooney. He reserved particular praise for Cohen: “And I want to acknowledge a special friend, somebody who is a great supporter of mine and is the chairman of this event, David Cohen is in the house. Please give him a round of applause.” Obama had good reason to single Cohen out: in late 2008 Cohen had hosted a fundraiser for candidate Obama featuring rocker Jon Bon Jovi, also an Obama supporter, that raised millions. (For 2012, Cohen has committed to raise $500,000 nationwide on behalf of Obama's reelection committee.)
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Cohen is not just an Obama supporter; he held a fundraiser to help Hillary Clinton retire her campaign debt in early 2009, with Vice President–elect Biden, Governor Rendell, Senator Bob Casey, and Mayor Nutter in attendance. Cohen had been enthusiastic about Clinton, giving her the maximum permitted individual donation, and Rendell had boasted that if Clinton had become president he would have recommended David Cohen to her for deputy chief of staff.
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Donors to the 2009 Specter events were required to write a check for ten thousand dollars or raise a minimum of fifty thousand, even though Specter was already trailing his Republican opponent by a substantial margin. “We would like to generate a literal outpouring of financial support for Sen. Specter,” Cohen said in a letter to Democratic fundraisers.
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All good things come around: Specter had hired Ed Rendell forty years earlier
to work in the district attorney's office, Rendell had hired Cohen, and Cohen, now a very powerful man in Philadelphia, was willing to try to save Specter's career. And it was a subcommittee of the Senate Judiciary Committee, of which Specter was a member, that held the hearings on the Comcast merger the following year.

Specter was broadly useful to the Comcast team; staffers told me that he set up meetings between senators and Brian Roberts. Although the decision on the merger was made by the Department of Justice and the FCC after Specter left office, his friendly presence at the subcommittee hearing in February 2010 could only have helped. He told those in the hearing room that he “approach[ed] the hearing with a little different perspective because I know Comcast and I know Brian Roberts and I know his father, Ralph Roberts. So I am in a position to attest to a number of critical factors evaluating whether this merger ought to occur. One factor that I can attest to is they are really very good corporate citizens.” Warming to his theme, Specter noted that the Comcast tower distinguished the Philadelphia skyline and, on a personal note, remarked that his son had teamed with Brian Roberts to win the gold medal at the Maccabiah Games squash tournament.
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Cohen is esteemed for his judgment and ability. Legislators and policy makers respect him. In 2008 he moved adroitly to soothe Rep. John Dingell's ruffled feathers at a time when Dingell (D-Mich.) chaired the House committee with jurisdiction over communications. Comcast had planned to move Michigan public, educational, and governmental (PEG) channels to digitaltier Siberia, in the 900s—a shift that would have forced approximately 450,000 analog subscribers in the state to get digital set-top boxes or new televisions in order to receive them. After officials in Dearborn and Meridian Township sued Comcast, a federal court in Michigan ordered the company to leave the PEG channels where they were. Dingell was irate and held a hearing on the matter—and it is not a good thing for any company to have the leading legislator with jurisdiction over its activities angry at it. Cohen flew to Washington, assured Dingell that the whole thing was a mistake, reversed the company's plan, and somehow remained on Dingell's good side throughout the entire affair. “I am pleased that Comcast, which had announced changes detrimental to the way it delivers PEG
services in Michigan, has agreed to make a good-faith effort to work out a settlement with the affected communities,” Dingell said. “I want to commend them for that.”
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Cohen was prepared to apologize publicly, saying, “In retrospect, we failed to communicate adequately our goals and to work cooperatively with our local partners to produce a win for everyone.”
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Only Cohen could have pulled that off.

After having been battered by then-FCC chairman Kevin Martin, who was widely viewed as hating the cable industry, Cohen was determined to change the perception of the cable guys in Washington. The National Cable & Telecommunications Association, the cable trade association (now headed by former FCC chairman Michael Powell), jumped in generously to help with the nation's transition to digital broadcast television after Obama's inauguration in early 2009, providing extensive assistance with call-center aid and other efforts to prepare people for the switch.
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And once the new administration was in place, Cohen praised Martin's successor, Genachowski, as “the most qualified person ever to be appointed” FCC boss: “He brings a great intellect, great experience, tremendous organization and a commitment to run fair, data-driven processes that will underline the decisions the commission makes under his leadership.”
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