The $45 Billion Question: Will Comcast Deal Put a Chokehold on the Internet?
By Todd Shields and David McLaughlin May 8, 2014 12:30 PM ET
May 8 (Bloomberg) -- Comcast and Time Warner Cable executives testify before the House Judiciary Committee today. But just how massive would this media merger be? Senior West Coast Correspondent Jon Erlichman breaks down the $45 billion deal.
Comcast Corp.’s (CMCSA) purchase of Time Warner Cable Inc. (TWC) should be blocked by U.S. regulators because the combined entity will be too big and may abuse its market power, said the leader of a company that carries one-fifth of the world’s Web traffic.
Comcast has demanded payment for delivering uninterrupted Internet content to subscribers, Cogent (CCOI) Communications Group Inc. Chief Executive Officer Dave Schaeffer told lawmakers at a hearing today in Washington. The companies previously exchanged Web traffic over the two-way data highway at no cost to each other, he said.
“As Comcast’s market power continued to increase, as consumers have less choice, they actually started to demand payments for connectivity,” Schaeffer said. “A larger Comcast will demand ever greater payments.”
Schaeffer told the House Judiciary Committee’s antitrust subcommittee that Netflix Inc. (NFLX) was “forced” to pay Comcast to connect to its network because the nation’s largest cable provider refused to augment capacity leading to congestion at interconnection points, Schaeffer said.
“That’s not a free market,” he said. “That’s an abuse of market power.”
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http://www.bloomberg.com/news/2014-05-08/comcast-time-warner-deal-dogged-by-isp-gripes-about-tolls.html
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