Comcast merger sparks calls for government intervention
by Josh Peterson, Watchdog.org, February 14, 2014
Critics of two of the nation’s largest cable providers are calling for the federal government to block a newly announced merger between the companies.
Comcast announced a $45 billion deal on Thursday merge with Time Warner Cable, affecting the latter company’s 8 million subscribers in New York City, Southern California, North Carolina, South Carolina and Texas (and Hawaii).
The merger would make Comcast the nation’s dominant cable TV and Internet provider, reaching nearly one-third of American homes.
The companies’ leaders expect the merger to take effect by the end of the year.
Already on edge over Comcast’s complete ownership of NBC Universal, progressive public interest groups Public Knowledge and Free Press, among other critics, stoked outrage on Twitter over the announcement and called for federal regulators to intervene.
The organizations allege the deal could lead to less competition in the nation’s cable market, ultimately resulting in U.S. consumers paying higher prices for poorer service.
Many consumers already resent Comcast for its poor customer service, as cataloged by the American Customer Satisfaction Index.
Comcast CEO Brian Roberts promoted the deal on Thursday, however, as “pro-consumer,” “pro-competitive” and “in the public interest,” reports the Philadelphia Inquirer.
Ken Auletta, a media critic writing for The New Yorker, doubted that federal regulators would oppose the deal, noting that Comcast is looking to increase its leverage against companies such as Netflix, which have been chipping away at its subscriber base and eating into its profit margins.
Berin Szoka, president of the free market tech think tank, TechFreedom, also pushed back against calls for regulators to block the deal.
Comcast agreed to conditions set by the Federal Communications Commission when the agency approved the company’s merger with NBC Universal in 2011, which prohibit it from engaging in anti-competitive behavior.
Szoka noted that Comcast would still have to abide by those conditions if it merged with Time Warner Cable.
“Those concerned about broadband competition should focus on the real problem: barriers to entry created by local governments and the pricing of rights away and pole attachments,” Szoka in a media statement.
“That’s what’s made it hard for companies like Google, Verizon and Centurylink to build fiber networks,” he said.