Comcast's mega-merger is no regulatory slam dunk

[ProSense]

By Jonathan Berr

Comcast's mega-merger is no regulatory slam dunk

Comcast's (CMCSA) $45.2 billion acquisition of smaller rival Time Warner Cable (TWC) would further cement the world's largest cable company's lead over its rivals -- and that's just what bothers many critics.

<...>

Of course, if the government demands concessions that merging companies find too onerous, the deal will be called off. Comcast argues that after the merger, it will control less than 30 percent of the multichannel video programming distributor market. The 30 percent ownership cap, however, has been vacated twice by the courts, so this shouldn't be a deal-breaker in itself...Comcast and Time Warner Cable are already planning to unload some Time Warner systems to appease regulators. The Wall Street Journal reported today that Philadelphia-based Comcast will also make its programming available to online rivals, expand its broadband services and provide more programming for minorities and children.

<...>

Critics, though, are not impressed.

"It's hard to understand how this kind of concentrated market power, which would account for almost three-quarters of the cable industry, is going to benefit consumers," said Delara Derakhshani, policy counsel for Consumers Union, in a press release. "It raises several red flags about the power and influence that one company would have on the marketplace, and the impact it would have on your wallet and the choices you get."

The American Cable Association (ACA), which represents about 850 small and midsize cable system also is skeptical, noting that the merger would enable the companies to demand "unfair terms and conditions" from other pay-TV companies.

- more -

http://www.cbsnews.com/news/comcasts-megamerger-is-no-regulatory-slam-dunk/

Consumers Union Opposes Comcast/Time Warner Cable Merger, Citing Serious Concerns About Pricing and Service

WASHINGTON, Feb. 13, 2014 /PRNewswire-USNewswire/ -- Comcast has proposed a deal to buy Time Warner Cable, a mega-merger that would combine the two largest cable providers in the United States.

Consumers Union, the policy and advocacy division of Consumer Reports, announced its opposition to the merger, citing the impact that the combination could have on prices and service.

Delara Derakhshani, policy counsel for Consumers Union, said, "Under this proposed deal, two huge companies would become a behemoth. This has the potential to be a very bad deal for consumers. This industry is notoriously unpopular with consumers due to poor customer service, not to mention ever-increasing bills, and a deal this size doesn't exactly convince us that things will get better. It's hard to understand how this kind of concentrated market power, which would account for almost three-quarters of the cable industry, is going to benefit consumers. It raises several red flags about the power and influence that one company would have on the marketplace, and the impact it would have on your wallet and the choices you get. We're counting on regulators to take a very hard look at what this enormous merger would do to competition, customer service, and bills that continue to climb year after year."

<...>

http://www.prnewswire.com/news-releases/consumers-union-opposes-comcasttime-warner-cable-merger-citing-serious-concerns-about-pricing-and-service-245421511.html

Comcast wants to buy Time Warner Cable. What could that mean for you?

When two cable giants move to merge, the outlook for consumers is murky—and ominous

<...>

The cable industry has historically been slow to innovate—although the last few years have brought a trickle of better cable boxes and higher broadband speeds. But there’s no reason to believe that a merger would lead the combined Comcast–Time Warner Cable to upgrade technology any faster than the prospect of Internet content providers such as Amazon, Google, and Netflix breathing down the individual companies' necks. And we’ll be watching closely to see whether those “significant cost savings” find their way to consumers.

Even if this merger doesn’t have a direct effect on regional competition, it could lead to a broader lack of competition in the industry as a whole. Large corporations make broad strategic decisions about things such as improving service in rural markets, rollouts of new technology platforms, net-neutrality policy, and consumer pricing. Such a large merger can also have an indirect effect on customers of smaller cable and telco companies that won't have the negotiating muscle that Comcast-Time Warner Cable will with cable channels—that could mean higher pricing for them.

According to Consumer Reports’ annual customer satisfaction survey, cable and telecom companies routinely score low on perceived value. Comcast came in eighth overall out of 16 companies in our Ratings of telecom bundlers, and Time Warner scored even lower, ranking 10th.

And the industry has hardly been friendly to consumers of late, with the recent Verizon vs. FCC ruling, and statements from cable executives such as Cablevision's CEO, Jim Dolan, about cracking down on promotional pricing. A Comcast-Time Warner Cable congomerate puts even more negotiating power in the hands of increasingly fewer companies.

- more -

http://www.consumerreports.org/cro/news/2014/02/what-does-comcast-time-warner-merger-mean-for-consumers/index.htm

[ProSense]

1. Kick! n/t