The Comcast-Time Warner Cable merger begins. Hold on to your butts
Comcast has published a blog post and filed a 180-page report espousing the benefits of its proposed merger with Time Warner Cable. This ahead of a meeting with the Senate Judiciary Committee on Wednesday. The due diligence, regulatory "oversight," and propaganda parade that could lead to one of the most controversial mergers in Internet history have begun.
Comcast's arguments are about what you would expect: the merger will supposedly benefit consumers, it will allow Time Warner Cable to update its infrastructure, and it will offer more options to consumers as wireless broadband starts to spread. What Comcast doesn't mention is that the merger would make it even more entrenched in the United States' Internet infrastructure and allow it to continue making deals that threaten both consumers and entrepreneurs, all while making even more money off Internet connections that lag behind much of the developed world.
Its efforts will be assisted by its vast contributions to the regulatory bodies overseeing the deal, the monopolies and duopolies that it has helped create in most markets, and its willingness to threaten the very foundation of the free Internet by striking preferential deals with companies like Netflix. The company has spent the last few decades trying to figure out how it can fuck the Internet -- this merger will determine just how rapacious it will be allowed to become.
Reactions from around the Web
Politico reports on consumer advocacy groups' dissatisfaction with the merger:
While Comcast’s statement includes a detailed economic analysis that contends the deal is a good one for the nation, Consumers Union issued its own analysis that attempts to refute that.Re/Code describes the monopolies Comcast and Time Warner Cable have been allowed to set up in most local markets:
'This merger causes such a massive increase in two other forms of market power – buyer and bottleneck market power – that it doesn’t just violate the antitrust laws and the Communications Act, it obliterates them,' said Mark Cooper, research director for the Consumer Federation of America. 'Ironically, the weakness of head-to-head competition in the broadband and multichannel video markets that Comcast reminds us about, magnifies the concern about the other forms of market power.'
'In many ways, wireless broadband is an even more formidable competitor because it offers consumers mobility and national reach,' Comcast said in the filing.The Washington Post explains why that's such a problem:
Consumers may see things differently. Most households are only reachable by one or two high-speed broadband providers, even if they live in a market like New York or Washington where companies provide service to various areas. And given the relatively high cost of LTE wireless broadband service and data caps, switching to wireless broadband may not be a realistic choice for consumers hoping to keep their monthly bills in check.
The Verge points out that most of the "benefits" of the merger are really just expansions of Comcast's products and services:
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, telecom and tech companies. After the merger, Comcast would have more than 40 percent of the home broadband market and 30 percent of cable subscribers.
In a 181-page document, the companies argued that Comcast's acquisition of TWC would give consumers network upgrades, better cable TV services, and expanded broadband access for low-income users. It's also seeking to allay fears that a merger would reduce competition in the already highly consolidated home broadband market.
Many of the promised benefits apparently stem from Comcast expanding its existing services to cover TWC customers. Its video service Xfinity On Demand will come to TWC markets, as will Comcast's subsidized "Internet Essentials" program for low-income Americans; the companies will pool their resources for Wi-Fi hotspots, with Comcast offering TWC subscribers access to its far bigger network. While a court eviscerated the FCC's net neutrality rules in February, Comcast is still required to abide by them until 2018 as part of a previous agreement, and the merger will require TWC to do the same.
Pando weighs inDavid Holmes wrote about the dangers the Comcast-Netflix deal poses to independent entrepreneurs and small companies when it was first announced earlier this year:
The Internet has historically been a place where anyone could post content or offer services to the same global audience, regardless of whether you’re a kid from Arkansas or a multi-national corporation. But it’s becoming more like cable TV where content providers have to bring loads to cash to the table before companies like Time Warner and Cablevision will bring that content to millions of eyeballs.I wrote about the reported Comcast-Apple deal when it was announced:
That could leave small-time players like [VoteRockIt founder Matt] Hudson stuck on the Internet equivalent of grainy, limited-audience public access TV.
Contrary to the narrative crafted by net neutrality activists, Comcast isn’t dabbling in back room deals that subtly undermine the idea of a free Internet where all data is treated equally. It’s created a system through which it is able to convince even net neutrality supporters like Netflix CEO Reed Hastings to pay for improved performance, to get Apple to pay for the ability to reach consumers at a decent speed, to become even larger in the ISP market, and to make donations to the lawmakers tasked with keeping it in check.I then wrote about the FCC’s unwillingness to defend the free Internet after Wheeler said that deals like that aren’t covered by existing net neutrality laws:
But let’s go ahead and focus on the news that Apple is developing a streaming media service through which it could tighten its grip on the digital media market and, because this is Apple we’re talking about, keep rumors of an aluminum-clad television set alive. Surely that’s more important than the systematic destruction of the ideals on which the technologies that would enable that service were founded. Gotta watch those “Breaking Bad” reruns, after all.
Splitting issues that could affect the foundation of the Internet and allowing companies like Comcast to hamstring the greatest technological innovation in human history — or at least the innovation just behind man-made fire and wine — because the FCC wants to focus on semantics is insane. The Internet isn’t just the series of tubes connecting Comcast’s infrastructure to our homes: it’s the whole damned thing, from the servers operated by companies like Netflix all the way down to the cables in our homes.And then I wrote about the European Union's attempts to defend the free Internet:
Comcast might not be violating net neutrality laws, but it’s certainly violating the spirit behind them. It’s about time the FCC did something about that.
The legislation is meant to provide access to online services 'without discrimination, restriction or interference, independent of the sender, receiver, type, content, device, service or application.' For example, ISPs would be barred from slowing down or 'throttling' the speed at which one service’s videos are delivered while allowing other services to stream at normal rates. To bastardize Gertrude Stein: a byte is a byte is a byte.[Illustration by Hallie Bateman for Pando]
Such restrictions would prevent deals like the one Comcast recently made with Netflix, which will allow the service’s videos to reach consumers faster than before. Comcast is also said to be in talks with Apple for a deal that would allow videos from its new streaming video service to reach consumers faster than videos from competitors. The Federal Communications Commission’s net neutrality laws don’t apply to those deals, according to FCC Chairman Tom Wheeler, so they are allowed to continue despite the threat they pose to the free Internet.