Back to the future by blocking the Comcast/TWC merger: How the government is killing competition

[Commentary] The Federal Communications Commission and Department of Justice have explained that they shut down the Comcast/Time Warner Cable merger largely out of concern that it would allow the merged companies to harm the streaming and over-the-top video marketplace. But the cable companies are already on the losing side in that marketplace -- the market power already favors the content providers. Indeed, Netflix has roughly three times as many subscribers as Comcast does, and more than twice as many as the merged Comcast/TWC would have had. And one of the clearest conclusions to draw from the FCC’s Open Internet proceeding is that Netflix has captured the hearts and minds of the Washington political elite. Welcome back to 1956.

The government is making the same mistakes again -- in an attempt to protect us from today’s bogeymen, it’s clearing the path for tomorrow’s monopolist. And, unlike 1956 -- when the bogeyman was an honest-and-true monopoly -- the company the government has cast in the role of “villain” is not a monopolist. Comcast and Time Warner Cable are in a market that is at least moderately competitive today and getting more competitive by the month. And, as the Netflixes of the world increasingly dominate the video marketplace, the government has robbed consumers of one of the few firms that could have stood tall in the face of the oncoming storm.

[Gus Hurwitz is an assistant professor at the University of Nebraska College of Law]