Comcast, Time Warner Cable merger faces a grilling in Washington this week
When Comcast sneezes, will too much of the technology industry catch a cold? That may be the central question facing regulators reviewing the company's $45 billion takeover of Time Warner Cable, a deal that again expands it cable television and, perhaps more importantly, its broadband Internet businesses.
The deal will be scrutinized in a Senate judiciary hearing and by regulators who will study Comcast’s arguments filed to the Federal Communications Commission and to the Justice Department. The merger on its face may not appear anticompetitive because Time Warner Cable and Comcast don’t compete in the same territories, analysts say. And that’s what Comcast stressed in its government filings, adding that it would commit to a string of conditions to assure it won’t squeeze out competition as the first-ever nationwide cable service provider.
But the problem isn’t only about getting bigger, public interest groups and smaller competitors say. It’s about the outsized power Comcast could have over an ecosystem of media, telecommunications and tech companies. After the merger, Comcast would have more than 40 percent of the home broadband market and 30 percent of cable subscribers.
Comcast refutes criticism that the deal is anticompetitive. It points to a thriving entertainment market where Netflix and Amazon compete with Comcast’s bundled cable television services. In the broadband market, Comcast points to competition from satellite firms, telecom companies such as Verizon with its FiOs service, and Google’s plans to expand its ultra-fast fiber service to dozens of cities.
But critics say satellite and wireless aren’t true broadband competitors because they're unable to deliver comparable fast downloads of videos and other large files. FiOs is in limited markets, and Google’s plans are years off in the future, they note.
But Comcast said it will commit to conditions to placate concerns. It will divest subscribers to keep its reach at 30 percent of the cable market, a benchmark that regulators say ensures competition between cable and satellite operators with programmers. It will extend network neutrality conditions that it committed to with the NBC merger. And it will continue to offer a low-income broadband service.
Comcast, Time Warner Cable merger faces a grilling in Washington this week Comcast files to start the TWC merger process. Here’s how regulators should view the deal. (GigaOm) Proposed Merger Would Enhance Competition, Say Comcast and Time Warner Cable (New York Times) Comcast filing defends Time Warner Cable deal (USAToday) Comcast: No Competitive Threats Here, Move Along (Revere Digital) Comcast Casts Itself as Little Company Made Good In Pitch to FCC (The Wrap) Comcast presents its case for Time Warner Cable takeover to the FCC (The Verge) Comcast Makes Its Public Interest Case to Washington (AdWeek) Comcast/TWC Submit Deal To FCC (B&C)