When Comcast tried to merge with Time Warner Cable last year, reaction was swift and negative. Not many people liked the idea of America’s largest and least loved cable company getting any bigger; the deal collapsed after hundreds of thousands of Americans spoke out and federal regulators signaled that they would not let it go forward.
Big Cable should have gotten the message. But here we are just a year later with a new cable mega-merger in the works. This time, Charter Communications wants to snatch up Time Warner Cable along with Bright House Networks.
Unfortunately, this deal hasn’t received nearly as much public attention as the Comcast-Time Warner Cable proposal. The harms it presents are just as serious however — serious enough for lawmakers and regulators to give this outrageous proposal the attention it merits.
Let’s start with some basics. The three merging companies would create a new Mega Cable company, controlling about one-third of the nation’s cable and cable broadband markets. In addition, the new colossus would own programming, including regional sports networks all across the country, and would completely dominate some of America’s largest media markets, including New York City, Los Angeles, Dallas, Charlotte, Tampa Bay, Orlando and St. Louis. Finally, the combined companies would have an anticompetitive incentive to preference their streaming video offering over that of competitors.
When you add it up, the new company would look a lot like, well, Comcast. Yes, this merger would create a new Comcast — a national cable giant with the ability and the incentive to thwart competition, diversity, and consumer choice.
And it gets worse. Because they don’t compete in any markets, Comcast and the new Mega Cable company would stand shoulder-to-shoulder in control of more than 70 percent of the high-speed broadband market. The two companies would have no incentive to compete against each other, but every incentive to coordinate against their shared marketplace competitors.
Thanks to services like Netflix, Hulu, and Sling, television is in the midst of a creative renaissance. These emerging services are finally breaking the decades-long stranglehold of the cable bundle on American consumers who have been forced to collectively fork over billions of dollars in monthly cable bills, largely to pay for channels they never watch. The services’ growth has been fabulous for consumers, content creators, and workers in the entertainment industry. Now, just when competition is finally gaining traction, the Comcast-Mega Cable duopoly could squash it.
Then there is the issue of independent programming. Already, too much of the cable dial is filled with content produced by a handful of media conglomerates. When the vast majority of cable homes are served by just two companies, it will become even harder for independent and diverse voices to gain a foothold. That is especially problematic because Comcast and the new Mega Cable will own content that directly competes with independent programmers.
That kind of dominance leads to homogenization of content and the marginalization of independent voices, cutting right to the heart of the public interest in diverse cable offerings that give voters a broad range of perspectives on the issues of the day.
Finally, there is the issue of price and customer service. To finance this deal, Charter will be taking on $27 billion in new debt — about $1,142 for each subscriber. To keep its lenders and creditors happy, the merged company will have every incentive to raise prices and slash service. And because it will face very little competition, the company will run little risk in doing so. How much more beneficial it would be if Charter invested those billions in building cable competition in presently uncompetitive markets!
The bottom line is that this merger is no less threatening to consumers than the Comcast-Time Warner Cable tie-up would have been. It points a dagger directly at competition, diversity in programming and consumer rights. Before it’s too late, the public should send a message telling regulators to once again stand up to the cable giants and stop this harmful merger.
Take action today to stop this affront to the public interest.
Office: Common Cause National
Issues: Media and Democracy
Tags: Media Monopolization