How a Comcast-Time Warner Merger Will Make Your Cable and Internet Worse and More Expensive
Photo Credit: CBS This Morning; Screenshot / YouTube.com
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In February, news broke that cable and Internet giants Time Warner Cable (TWC) and Comcast would be merging, placing a new mega-company in charge of services rendered to their 30 million customers. And neither the Obama administration nor Congress don't seem to be raising many red flags. David Carr in the New York Times recently wondered aloud about Comcast’s $45 billion bid for TWC,“How can the largest cable company in the country bid to buy the second-largest and gain control over 19 of the country’s top 20 markets — corralling a 30 percent market share in cable and a 40 percent share in broadband — and there be no serious questions?"
In its public interest statement filed this month with the Federal Communications Commission, Comcast touts the many supposed benefits of the merger, even arguing that joining with TWC would be “pro-consumer, pro-competitive, and... generate substantial public interest benefits.” But a review of the facts shows exactly how wild this claim is.
One Monopoly To Serve Them All
In order to bolster its claim that a Comcast-TWC merger wouldn’t be anti-competitive, Comcast argues in its public interest statement that it has a much smaller footprint in the market than its competitors. It cites, for example, Microsoft announcing “that it will feature ads on the Xbox One, creating a new video advertising platform,” and the fact that “Amazon continues to leverage its unequaled sales platform and family of competitive tablets to promote its burgeoning Prime Instant Video business ... .In contrast to all of these companies, both Comcast and TWC have a more limited scale and scope.”
The problem with this argument is that Amazon and Microsoft, as vast as their empires are, don’t control people’s basic access to cable television and broadband (which is more or less a necessity for Internet users in 2014). The Xbox One offering Netflix doesn’t prevent users from accessing the service on dozens of other competing devices, but the same is not the case for access to basic information that TWC and Comcast’s cable networks provide. If the merger were to go through, tens of millions of Americans would be locked into less competitive cable and broadband markets, unable to vote with their feet and choose competitors who offer different services.
How monopolistic would the new Comcast-TWC company be? Susan Crawford, co-director of the Berkman Center for Internet & Society at Harvard University, estimates that the “network would pass nearly two-thirds of American households (meaning that those homes could be connected to the company’s network without any further extension of the network). The company would have just one direct competitor: Verizon’s FiOS service, which would overlap with just 15 percent of the new company’s territory.”
Consumers Union warns that “Comcast owns a wide assortment of content and television channels as a result of its previous merger with NBC Universal. By owning a massive network of cable and broadband pipelines and significant content, Comcast would have the ability to control the speed, quality, and type of programming for an unprecedented number of consumers.”
But it’s not just consumers that could get the short end of the stick.
“In a future without Net Neutrality, Comcast would be free to act as the Internet's editor-in-chief, choosing what content and services get attention, and what doesn't -- what content gets to pass through its pipes, and what content gets blocked,” says Free Press’s Tim Kar. “This would not only snub out any online innovation that Comcast doesn't control, it would also threaten the free speech rights of all online users, including journalists.”
Ironically, Comcast is arguing today that buying TWC would be good for consumers, but it made the opposite argument in 2010 — that keeping TWC as a competitor would prevent anti-competitive behavior following its purchase of NBCUniversal. At a Senate Judiciary Committee hearing this month, Sen. Al Franken (D-MN) pointed out this hypocrisy: