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Comcast-Time Warner Megamerger Would Cause Major Problems for Competition

Comcast Corporation Executive Vice President David Cohen and Time Warner Cable Inc. Executive Vice President and Chief Financial Officer Arthur T. Minson, Jr. / AP
• September 8, 2014 11:39 am

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Comcast’s media rivals are beginning to raise concerns that the company’s proposed merger with Time Warner Cable could create an uncompetitive monopoly, the New York Post reports.

The Federal Communications Commission (FCC), the regulatory agency that must approve the merger, has so far received more than 75,000 complaints about the potential $45 billion deal.

Here are some of the biggest problems the merger could cause:

  • Broadband: Comcast-TWC can put strict conditions on channels seeking to distribute content on digital platforms. For example, if viewers want to binge-watch the latest season of "Cake Boss," Comcast might stop programmers from selling it to Netflix or Hulu for weeks or months or at all. Comcast has invested billions in its proprietary Xfinity branded set-top-box which programmers and the likes of Apple TV, Netflix and Roku would love access to. "They want everything to go through the Xfinity box," said a source, "so they can scrape all that valuable data. It’s a huge problem." If that isn’t scary enough, competitors say, Comcast could decide to go over-the-top with its programming bundle and operate a national online video service that would super charge that database on a national scale. "The FCC could ask for a delay in Comcast’s OTT plans, people are already asking them to do that," said a source.
  • TV channels: Comcast is already a very powerful distributor in 22 million homes, [so] adding Time Warner Cable’s 11.1 million subscribers means it could shut down competitors by denying them distribution. (Comcast is shedding around three million subscribers but will own the majority stake in a proposed spin-off cable service called GreatLand Connections.) If channels aren’t able to reach 70 million households then few advertisers will be willing to buy in, rivals fear.
  • Sports: Comcast owns a host of sports rights from NFL, the top rated show on broadcast TV, to the NHL, while it also programs a number of Regional Sports Networks. Rivals also believe Comcast will control the Olympics in perpetuity and could be in a position to demand the likes of college sports broadcaster SEC Network to give up its scheduling information and ask for the best games to be transferred to a Comcast-owned NBC property. "They could insist on that and if [you] don’t agree, it’s too bad you won’t be carried," said one source. Comcast has until the end of September to respond.

Published under: Comcast