Comcast, Time Warner Cable Merger Could Harm Consumers, Raise Prices

Could also crowd out competition from politically affiliated networks

Comcast Executive Vice President David Cohen and Time Warner Cable Inc., Executive Vice President and CFO Arthur T. Minson Jr. / AP
April 9, 2014

Lawmakers and witnesses on Wednesday raised concerns that a proposed merger between cable television giants Comcast and Time Warner Cable could harm consumers and stifle competition.

Comcast’s potential $45 billion purchase of Time Warner Cable would unite the two largest cable companies and high-speed Internet service providers in the country. The combined company would control about 30 percent of the national pay-TV market and nearly 40 percent of the high-speed wire line broadband Internet market.

Representatives for independent cable networks, Internet providers, and consumer advocacy groups told the Senate Judiciary Committee that the deal could limit competition and raise prices for consumers. Executives for Comcast and Time Warner Cable defended the proposed merger as a beneficial outcome for customers that would lead to more investment and better services.

Sen. Mike Lee (R., Utah), ranking member on the subcommittee on antitrust, competition policy, and consumer rights, said the deal could have far-reaching implications beyond market consolidation.

He called Comcast’s prior purchase of NBC Universal in 2011—a deal worth nearly $14 billion—a "complicating factor."

"Considering the significant share of the video and internet market that the new Comcast would have, and the well-known political leanings of NBC, I have heard concerns that Comcast might have the incentive and ability to discriminate against certain political content—namely conservative content," he said.

The cable network MSNBC is widely viewed as left-leaning.

David Cohen, executive vice president of Comcast, said his company has committed to owning no more than 30 percent of the national TV market. Market access will not be an issue, he added.

However, political spending by Comcast, Time Warner Cable, and its executives raise questions about the future treatment of political content and the oversight process for the proposed merger.

Both Comcast and Time Warner have spent millions on political campaigns in the past couple decades, more than half going to Democrats. Cohen, a frequent visitor at the White House, has raised more than $2 million for President Barack Obama since 2007.

Comcast has also donated thousands in campaign contributions to all but three of the senators on the committee, with larger sums collected by Democrats. Lee’s subcommittee helps provide oversight of regulators at the Justice Department and Federal Communications Commission (FCC) that would approve the merger.

Cohen said the deal would not limit choices for consumers because Comcast and Time Warner Cable’s current markets do not overlap in most cases. The combined companies would serve about 30 million customers.

Sen. Al Franken (D., Minn.) said Comcast’s prior acquisition of NBC undermines that claim.

"If this deal goes through, Comcast will never again have to negotiate with Time Warner Cable when it comes to negotiating content for NBC Universal," he said. "Comcast can’t have it both ways."

Cohen said consumers would be the "big winners" from the deal, but he could not guarantee that their bills will not increase.