A Comcast behemoth could cause serious concerns
Comcast’s proposed $45 billion acquisition of Time Warner Cable is a case of a giant fish being swallowed by an even more gigantic fish. It is easy to see how it will benefit stockholders of both companies, but it is difficult to see how this will benefit disgruntled cable customers plagued by the combination of steadily rising bills and steadily declining service.
Anticipating an antitrust challenge from the U.S. Justice Department, Comcast has taken pains to point out that none of its subscriber base overlaps with Time Warner. This hardly seems like a selling point. If Comcast and Time Warner were competitors and remained that way it would inspire each to provide better service at lower costs. Comcast is correct that it is getting rigorous competition from satellite TV providers, but the purchase would enable it to dominate the cable TV market, giving it huge power in negotiations with media companies. Time Warner occasionally infuriates customers by pulling or threatening to pull programming from its systems as a transparent negotiating ploy with TV networks. A Comcast behemoth would be even more tempted to resort to this strategy.
Increasingly fast and versatile broadband Internet service may at some point send cable the way of Hollywood Video, and this purchase would give a merged Comcast and Time Warner 38 percent of the high-speed Internet market and nearly twice as many subscribers as the next largest company, according to statistics from the Leichtman Research Group provided to The New York Times. This is as worrisome, if not more so, than is Comcast’s potential cable dominance.
Comcast describes the concerns raised about its proposed purchase as "hysteria," but they are in fact legitimate. The idea of Senate hearings on the proposal has been floated and should be pursued and Justice should do a thorough job of exploring the ramifications of the purchase. Those ramifications could be dramatic, far-reaching and impossible to undo.
~The Berkshire Eagle
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.