Winnipeg Free Press - ONLINE EDITION

Comcast deal needs regulation

  • Print

The proposed merger between Comcast and Time Warner Cable, the country’s two largest cable TV operators, generated a predictable wave of outrage from opponents of corporate consolidation. With about 30 percent of all pay-TV customers served by its wires, the combined company would have extraordinary leverage when negotiating with television networks over the fees for their programming. It also would be the gatekeeper to a third of all U.S. homes with broadband.

Those are scary scenarios for consumers and content companies. The underlying problem for them, particularly in broadband, is that today’s markets have too few competitors to protect against service providers that put their thumbs on the competitive scales. But while Comcast’s takeover of Time Warner Cable wouldn’t improve that situation, it wouldn’t necessarily make it worse either.

Unlike AT&T and T-Mobile, whose proposed merger was blocked by the Justice Department, Comcast and Time Warner Cable don’t go head-to-head in any markets. Their lines run in different cities, or in the case of New York and a few other towns, in different neighborhoods. So the concerns raised by the deal stem mainly from the extra weight Comcast will be able to throw around when negotiating for content, equipment and bandwidth.

Some supporters of the deal say that a larger Comcast-TWC entity would be able to pay TV networks less for their programs, holding down the fees that have driven up consumers’ monthly cable bills. That may be true, but there’s also the risk that Comcast would use its leverage over TV programmers to gain an unfair advantage over other pay-TV providers, such as DirecTV and Verizon’s FiOS. Or that it would charge them excessive fees for the programming networks it owns, including NBC and regional sports channels.

In broadband, the merger could accelerate Comcast’s efforts to create a nationwide Wi-Fi-based data network to compete with the mobile phone companies’ offerings. But it also would let Comcast impose data caps and other market-distorting restrictions on millions of additional customers. Not coincidentally, such restrictions could make life more difficult for Netflix and other online services that are growing in popularity at cable operators’ expense. The merger would give Comcast more incentive and opportunity to engage in such mischief.

The shortage of broadband service providers — most homes have no more than two to choose from — leaves consumers with little ability to dump an Internet service provider whose terms they don’t like. Regulators have a head start, however, in stopping Comcast from abusing the market power it would gain by acquiring Time Warner Cable. The Federal Communications Commission imposed a number of restrictions on Comcast in 2011 when it bought NBC Universal, aiming to protect against self-dealing and other forms of anti-competitive behavior online and on its cable system. Among other things, Comcast is compelled to live by the FCC’s "net neutrality" rules, even the ones a federal appeals court has thrown out. Those protections would go a long way toward mitigating the risks posed by the expanding bulk of Comcast, while still allowing two noncompetitors to join forces.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Chief justices breakdown cameras in courtroom project

View more like this

Photo Store Gallery

  • PHIL.HOSSACK@FREEPRESS.MB.CA 100527-Winnipeg Free Press THe Provencher Foot Bridge is lit up
  • Marc Gallant / Winnipeg Free Press.  Local/Weather Standup- Catching rays. Prairie Dog stretches out at Fort Whyte Centre. Fort Whyte has a Prairie Dog enclosure with aprox. 20 dogs young and old. 060607.

View More Gallery Photos

Poll

What are you most looking forward to this Easter weekend?

View Results

View Related Story

Ads by Google