February 14, 2014

Comcast-Time Warner Cable Merger: Match Made in Heaven or Bloody Valentine?

comcast time warner cable logosJust in time for Valentines Day, new industry sweethearts, Comcast and Time Warner Cable, announced a merger to "create a world-class technology and media company." What does this mean for content creators, net neutrality, Apple TV, and those of you waiting for the internet repairman to show up at your house? Read about the controversial merger and weigh in with your thoughts below.

After over six months of offers from other potential mates like Charter Communications, yesterday Comcast proposed and Time Warner Cable accepted to the tune of $45.2 billion dollars in stock. Reactions to this mega-merger have been mixed to say the least (though Gizmodo shared some tweets that shed some light on people's sentiments). Both companies are known for their exceptionally low customer service scores. Now that they've merged, is it possible that their new incarnation will lead the way to better business practices? Here is Comcast's take on the benefits of the merger per their press release:

Through this merger, more American consumers will benefit from technological innovations, including a superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi...American businesses will benefit from a broader platform, and the Company will be better able to offer advanced services like high-performance point-to-point and multi-point Ethernet services and cloud-based managed services to enterprises.

No big surprise, but not everyone is convinced the merger will lead to good things. Quite a few public watch groups have pointed to the dangers of such a huge merger. For example, here is a statement released by Public Knowledge Attorney, John Bergmayer:

An enlarged Comcast would be the bully in the schoolyard, able to dictate terms to content creators, Internet companies, other communications networks that must interconnect with it, and distributors who must access its content.

After the merger, Comcast will now control one-third of high-speed Internet market. For those who were recently disappointed when the FCC's net neutrality rules were dismissed by the D.C. Circuit, this might be a chance to make another push to get them back. There is speculation that FCC Chairman Tom Wheeler, who might have a good case for blocking the legality of the merger, might instead bargain for rules on net neutrality to be accepted by Comcast-TW Cable.

Know who else is probably a little upset about the merger? Apple. A few hours before the announcement of the merger, Apple announced it would be releasing its new Apple TV box in less than two months. Apple was almost done negotiating its first ever deal with a cable provider for content on Apple TV. Who was that cable provider? Time Warner Cable.

Fellow content creators, what are your thoughts about the Comcast-TWC merger?

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13 Comments

Comcast already agreed to net neutrality rules under its merger with NBCUniversal. "Comcast agreed to abide by the principle of net neutrality — meaning, it would treat all online traffic equally and not give preferential treatment to its own video — as a condition of its 2011 acquisition of NBCUniversal. The consent decree, which is designed to protect competition, extends through the end of 2017. Time Warner Cable would also be subject to these same terms, if the merger is consummated."
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-comcast-me...

This hasn't worked very well as Comcast as already found loopholes, such as enacting a cap with loopholes for partners like Xbox - http://tech.fortune.cnn.com/2012/05/16/comcast/.

While this would provide another bite at the apple, I just don't think the FCC is up to the task of enacting rules to ensure net neutrality is protected.

February 14, 2014 at 6:33PM, Edited September 4, 11:45AM

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Mark

This is a terrible idea. I hope like the AT&T/T-Mobile merger the regulators quash this one. The last thing the telecom industry needs in more consolidation. The last thing the FCC should do negotiate is more faux common carrier agreements.

However, Wheeler is an industry stooge so I'm not sure he's got the backbone to stand up the people who will give him a job in a few years.

Really I fail to see any upside here except for Comcast. Is there something I'm missing? Seriously because to me it seems to obviously a bad idea I'm not sure why it isn't even being debated. I hate to feel so one sided about an issue.

February 14, 2014 at 8:36PM, Edited September 4, 11:45AM

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Joel Richards

The march toward a full-fledged oligarchy in the US continues unabated.

February 14, 2014 at 10:15PM, Edited September 4, 11:45AM

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Swissted

The FCC is a joke.

February 15, 2014 at 1:41AM, Edited September 4, 11:45AM

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moebius22

http://www.businessweek.com/articles/2014-02-13/a-comcast-time-warner-ca...
> “and will be essentially equivalent to Comcast Cable’s subscriber share after its completion of both the 2002 AT&T Broadband transaction and the 2006 Adelphia transaction.”

Not really that much of a big deal the merger, as even after the merger it will still be smaller than it has been in the past.

Cable companies like the telegraph, are a dying breed. Google, Apple, Amazon, Netflix, and satellite TV is their new competition now, not each other.

Plus anyway, Cable is a luxury item anybody can do without. If they go nuts with their charging people will just pick different luxury spending instead, such as wine, or shoes, or baseball tickets.

Read this for fair coverage:
http://techfreedom.org/post/76540083322/comcast-time-warner-merger-wont-...

February 15, 2014 at 2:56AM, Edited September 4, 11:45AM

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I wasnt gonna comment but after reading more about this deal I cant keep quiet. If you enjoy paying high cable rates you're gonna love this merger. Your monthly bill will go through the roof if this happens. Like its not high enough already, right. Theres only one reason I see this happening. NBC feeds the machine, cnbc, msnbc and now Comcast are bigtime Obama/Democratic supporters. I'm an independent, their motive does not effect me one way or the other, I make my own decisions when it comes to politics. Another right or left wing network would make no difference to me or my viewing habits. However this deal is sweet and not just for comcast or the shareholders of Time Warner but also for the administration as well. It's most likely going to happen but if more of us speak out against it (if not for anything else but a cheaper cable bill) then it can be stopped. 1/3 of the market is huge, if we're about to make any progress or we have already when it comes to wall st. My question is, isn't this like taking 2 steps back? They'll consume Disney next. Like the youth ain't screwed up enough already. Ha

February 15, 2014 at 3:17AM, Edited September 4, 11:45AM

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anonymous on purpose

Where I'm at in Indianapolis Comcast is my only option for high speed internet. I would love to see Google do there ISP deal here. Satellite TV I have had but stop it years ago because anytime a storm moved in we lost signal. My neighbors who hook up to Satellite this year still has that problem. I don't watch much TV myself but my wife does. Comcast is increasing my speed again this spring for free. Last year they up it to 50 Mbps down and 10 Mbps up . Now they taking us to 105 mbps down and 20 mbps up.

February 15, 2014 at 9:52AM, Edited September 4, 11:45AM

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Michael Bishop

The problem with the stated speeds is that, if you have something like Netflix, your actual prime time streaming will barely let you have a 480p quality video. TW blames Netflix. Netflix blames TW. Comcast is obviously promoting Infinity and will offer something to compete with Netflix and Amazon Prime. This company in particular and the industry as a whole, of course, gives generously - or greases palms, if you will - on both sides of the aisle. The real problem is the rotten cable system that was set up all those years ago. At least, the wireless business has a number of competitors. Cable is local monopoly and how it's "regulated" depends on how well it's connected to the political elite and, after decades in the fray, these folks are well connected indeed.
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PS. For those who think that fiber-to-home is the answer, the cable company will often have enough clout to limit their competition there as well by using the political muscle to prevent the construction of these networks via any means possible. Don't think Keystone is the sole project that gets stuck at the project stage.

February 15, 2014 at 11:04AM, Edited September 4, 11:45AM

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DLD

No. Just no. This is media consolidation of the worst kind. And our media is already consolidated. There is less competition for pricing and less diversity. As stated here 90% of our media is controlled by 6 corporations.
http://www.businessinsider.com/these-6-corporations-control-90-of-the-me...

And just this past Christmas the last black owned TV stations were sold to ION Media.
http://www.freepress.net/blog/2013/12/20/sorry-moment-history-american-m...

And this documentary is also essential viewing. Unfortunately it's not streamable anywhere.
http://shadowsofliberty.org/

February 15, 2014 at 12:31PM, Edited September 4, 11:45AM

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earnest reply

Well first off, Apple didn't announce anything, it's just speculation that they were getting in a content deal with Time Warner. Second of all, i would like to put my opinion out there and say that i don't want this to happen and it probably won't. The reason it won't is because it needs to pass through several gov't bodies for it to be accepted, including the FCC and the DOJ. And while the FCC might negotiate with the merger over Net Neutrality (which i doubt), the DOJ won't make any negotiations. This merger would mean that there would be practically a monopoly on television and internet, and this will stifle growth in their respective industries, and that's what the DOJ would be interested in; The DOJ wouldn't let this happen, or at least i would believe they would. What these people are interested in is money, not their consumers. This will further ruin an already ruined industry. Even still i hope that this will be the beginning of a new era for television. We need more content creators and holders. We need more producers, writers, directors, and networks who are willing to take risks. Every industry works better when there is more competition, and TV is in dire need of competition. But competition is television is much tougher when all the content is being collectivized within a hand full of companies. Even more troubling is the fact that many of these content companies are also the companies that offer the television service directly, along with the content. Without this separation, i don't think the you can really compete. if we could possibly separate the content owners from the television providers, then i think television would have a much better chance; but with this merger i don't see us getting anywhere.

February 15, 2014 at 6:17PM, Edited September 4, 11:45AM

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Romeu

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a blog from start to end.

February 16, 2014 at 2:11PM, Edited September 4, 11:45AM

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As I said -
http://www.foxnews.com/tech/2014/02/15/real-reason-your-cable-bill-is-so....
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"The big news: Comcast is taking over Time Warner Cable, creating by far the country's largest cable and Internet provider. The company is marshalling an army of lobbyists in D.C. to get the deal past federal regulators.
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The smaller news: Recent legislative moves on the state level. Legislators in Utah and Kansas have put forward bills that would make it difficult for cities to run their own broadband networks. These prohibitions are much favored by big cable operators, like Comcast and Time Warner cable; there are already more than a dozen states that have such restrictions."

February 17, 2014 at 11:03AM, Edited September 4, 11:45AM

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DLD

Well, some positive news with Comcast and Netflix (presuming this is not a temporary truce) -

" Summary: It looks like Comcast and Netflix have resolved their peering dispute, but it’s unclear how. Comcast customers should rejoice because the quality of their video streams should get better."
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http://gigaom.com/2014/02/21/comcast-netflix-peering/

February 23, 2014 at 12:50AM, Edited September 4, 11:45AM

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DLD