NY Times: DOJ, FCC should block Comcast-TWC merger

By on May, 27 2014 with Comments 4

New York TimesThere are good reasons the Justice Department and the Federal Communications Commission should block Comcast’s $45 billion acquisition of Time Warner Cable, says the NY Times Editorial Board. Here’s the editorial piece, “A Cable Merger Too Far”:

The merger will concentrate too much market power in the hands of one company, creating a telecommunications colossus the likes of which the country has not seen since 1984 when the government forced the breakup of the original AT&T telephone monopoly.

The combined company would provide cable-TV service to nearly 30 percent of American homes and high-speed Internet service to nearly 40 percent. Even without this merger and the proposed AT&T-DirecTV deal, the telecommunications industry has limited competition, especially in the critical market for high-speed Internet service, or broadband, where consumer choice usually means picking between the local cable or phone company.

By buying Time Warner Cable, Comcast would become a gatekeeper over what consumers watch, read and listen to. The company would have more power to compel Internet content companies like Netflix and Google, which owns YouTube, to pay Comcast for better access to its broadband network. Netflix, a dominant player in video streaming, has already signed such an agreement with the company. This could put start-ups and smaller companies without deep pockets at a competitive disadvantage.

There are also worries that a bigger Comcast would have more power to refuse to carry channels that compete with programming owned by NBC Universal, which it owns. Comcast executives say that they would not favor content the company controls at the expense of other media businesses.

The company argues that this deal would not reduce choice because the company does not directly compete with Time Warner Cable anywhere. Comcast would face plenty of competition in high-speed Internet service, they say, from telephone and wireless companies.

The reality is far different. At the end of 2012, according to the F.C.C., 64 percent of American homes had only one or at most two choices for Internet service that most people would consider broadband. Wireless services can handle streaming video, but many customers of Verizon or AT&T would blow through their monthly wireless data plan by streaming just one two-hour high-definition movie, at which point they would have to fork over extra fees.

Comcast executives argue that companies like Sprint are planning to provide very fast Internet service that will compete with wired broadband. But wireless companies have been working on such services for more than a decade with little success.

The Justice Department and the F.C.C. could try to address some of the problems with the Comcast-Time Warner Cable deal by imposing conditions, like requiring the company not to give favored treatment to established content providers like Netflix and Google at the expense of smaller companies. Comcast agreed to similar terms in exchange for government approval of its 2011 acquisition of NBC Universal.

Even so, this merger would fundamentally change the structure of this important industry and give one company too much control over what information, shows, movies and sports Americans can access on TVs and the Internet. Federal regulators should challenge this deal.”

See the NY Times editorial story here

RBR-TVBR observation: Most already know that this deal will go through under the current conditions at the FCC and DOJ. Comcast and TWC likely wouldn’t have taken it this far if there weren’t some assurances given before the announcement was made. However, with all of the red flags being waved on the deal from private and public entities, it’s likely that a good deal of conditions will be on the table before full approval. But yes, this deal will end up putting control of the internet/television media content, pricing and access into the hands of even fewer companies than we already have here in the US.

About The Author: Carl has been with RBR-TVBR since 1997 and is currently Managing Director/Senior Editor. Residing in Northern Virginia, he covers the business of broadcasting, advertising, programming, new media and engineering. He’s also done a great deal of interviews for the company and handles our ever-growing stable of bylined columnists.

  1. James Johnson Says:

    I do not trust Comcast (TCI). In the 1990s the Dallas call center was run by someone who decided to transfer calls out of the Automatic Call Distribution (ACD) system and park the calls on CSRs second phone lines to keep the truth about how long callers were waiting from being known. I do not believe that the merger of TCI (57%) and Comcast (43%) has improved the “new” company and I believe that the dishonest management team from TCI will make Comcast with Time Warner a corrupt company. What we now know as Comcast should be called TCI since TCI makes up 57% of Comcast.

  2. What with all of the negative feedback, and a complete lack of any positives (that I’ve read about) I find it amazing that regulators would consider allowing this deal to go through.

    Well, I would find it amazing, if I had a glimmer of hope that the regulators, who are supposed to be caretakers of the public interest, would act in the public interest. In reality, if you are a large mega-corp, you are the public; if you are a person, you are nothing but a wallet to be cleaned out….

  3. Lloyd Crunion Says:

    Comcast will of course shut down Time Warner call centers and offices and keep their own. Over the past few years Comcast has been consolidating their geographic divisions shutting down regional offices especially at the Spotlight advertising insertion division. Been there, was laid off in 2009 when Chicago and Boston Spotlight Ops Centers were shut down. Why? Because the VP of the newly formed North Central Division had his office in Michigan..so guess which Spotlight office stays open? You got it. If you work for Time Warner or some remaining regional Comcast offices you should update your resume. Comcast is doing for cable what Clear Channel did for radio.

  4. Paul Leonard Says:

    Ah yes, here we go with the merger of the two media companies that have the lowest rated on time appointments guaranteed and yes that 2-4 hour window only to show up late. May sound like a small part of the puzzle but ask those consumers who sit and wait and wait and wait. Comcast/xfinity has proven they only care about BIG business. The idea that Brian Roberts of this soon to be behemoth of a company can walk into the White House any time and talk with the White House power brokers leaves me with a BAD taste in my mouth.

    Finally, with our President having little over two years left on his second and last term Mr. Roberts is making sure he gets everything he asks for before Mr. Obama leaves office. In the past I have had a couple of troubling experiences with COMCAST/xfinity. If they treat other consumers like I’ve be treated then it’s time for DirecTV. One final note, the idea of having an internet that can be split into two different outputs(the funnel with media whole and exiting as two different signals) must be stopped. I wonder what kind political support had to guaranteed before Comcast/TWC will get the go ahead. Just my two cents(with inflation) $0.12.