FacebookTwitterGoogle+RedditEmail

Can the Comcast and Time/Warner Cable Merger be Stopped?

by DAVID ROSEN

The announced merger agreement between Comcast and Time Warner Cable (TWC) for $45 billion in stock will combine the nation’s two of the nation’s largest media companies.  Each is a major cable multi-system operator (MSO) within an industry structured on the basis of local “regulated” monopolies, with little meaningful competition.  The merger will be one more step in the further consolidation of the media marketplace that includes “last mile” connections for wireline delivery, wireless communications, Internet access and, increasingly, programming.

Comcast is the largest cable and home Internet service provider (ISP) in the U.S., with 2013 revenues of $64.6 billion. The new post-merger media behemoth will control 34 million cable subscribers throughout the country.  Among the territories it currently controls are Boston, Chicago, Denver, Detroit, Houston and Philadelphia.  In 2011, it acquired NBC-Universal Pictures from GE, including 33 local TV stations, the Spanish-language network, Telemundo, 13 cable networks (including USA, CNBC, Bravo, SyFy, MSNBC, CNBC, NBC Sports, Oxygen, the Weather Channel) as well as Universal, a major movie studio (and Focus Features, a boutique “art house” micro-studio) as well as the Universal theme parks in LA and Florida.  It addition, it controls the Golf Channel, E! Entertainment, G-4, Style and regional sports cable services as well as the lifestyle website, Daily Candy.  It also runs the Philadelphia Flyers NHL franchise and the NBA’s Philadelphia 76ers.

TWC’s 2013 revenue were $22.1 billion and provides cable service in 29 states, with controlling interests in Dallas, Los Angeles and New York as well as large segments of Maine, North Carolina and Ohio.  Under increasing financial problems resulting from its shotgun marriage with AOL, Time Warned spun off its TWC holdings in March 2009.

Cable television emerged in the late-1940s as a “retransmission” service to improve the signal quality of over-the-air broadcast analog TV channels.  Broadcast TV viewers often received signals that were dimmed or blocked because the local station’s signal was weak or due to interference from natural obstacles (e.g., mountains).  In the 60-plus years since the first cable wires were strung, the industry slowly improved the carrying capacity of the underlying coaxial “cable” and, with digital technologies, enomously increased the number of channels it could offer.

The cable industry’s power is two fold.  First, cable companies operate on the basis of an exclusive franchise negotiated with a particular locality.  Second, cable companies long controlled in-home access to video programming through a subscriber’s rental of the cable converter or set-top box.  Until recently, the cable industry effectively limited competition by restricting programming sources to major media conglomerates and resisting alternative signal providers especially via the Internet.  Today, the cable industry consists of two overlapping (and increasingly integrated) oligopolies: (i) cable multi-system “operators” (MSOs) or distribution companies and (ii) powerful “content” or programming companies exemplified by the Comcast-NBC-Universal merger.

Under today’s “regulated” media marketplace, cable monopolies face apparent competition from satellite companies like DirecTV and telecom companies like AT&T (Uverse) and Verizon (FiOS).  To appreciate how dubious such competition is, in 2011 Comcast and TWC (along with Bright House and Cox) signed a co-marketing agreement with Verizon.  Under the agreement, Verizon ceded competition over the delivery of broadband services in specific territories controlled by the cable companies for control over wireless services.  This contributed to Verizon’s decision to stop building-out its competitive FiOS service.

In all likelihood, the Washington, DC, No Theatre of public “regulatory” deception, the FCC and the Dept. of Justice will approve the merger.  Comcast will likely divest 3 million subscribers to comply within terms of what is known as the “30 percent rule” that ostensibly assures industry competition.  In addition, it is also expect to agreed to net neutrality requirements that it agreed to when it acquired NBC-Universal.

However, the consequences of the merger are clean.  As Free Press notes, “Comcast will have unprecedented market power over consumers and an unprecedented ability to exert its influence over any channels or businesses that want to reach Comcast’s customers.”  Corporate executives and bankers will get rich, cable jobs will be cut through “efficiencies” and subscribers will get worse services at higher prices.  And the U.S. status as a 2nd-rate telecom nation will only get worse.

David Rosen regularly contributes to the AlterNet, Brooklyn Rail, Filmmaker and IndieWire; check out www.DavidRosenWrites.com.  He can be reached at drosennyc@verizon.net.

 

 

 

David Rosen is the author of Sex, Sin & Subversion:  The Transformation of 1950s New York’s Forbidden into America’s New Normal (Skyhorse, 2015).  He can be reached at drosennyc@verizon.net; check out www.DavidRosenWrites.com.

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

January 24, 2017
Anthony DiMaggio
Reflections on DC: Promises and Pitfalls in the Anti-Trump Uprising
Sharmini Peries - Michael Hudson
Developer Welfare: Trump’s Infrastructure Plan
Melvin Goodman
Trump at the CIA: the Orwellian World of Alternative Facts
Sam Mitrani – Chad Pearson
A Short History of Liberal Myths and Anti-Labor Politics
Kristine Mattis
Democracy is Not a Team Sport
Andrew Smolski
Third Coast Pillory: Mexico, Neo-Nationalism and the Capitalist World-System
Ted Rall
The Women’s March Was a Dismal Failure and a Hopeful Sign
Norman Pollack
Woman’s March: Halt at the Water’s Edge
Pepe Escobar
Will Trump Hop on an American Silk Road?
Franklin Lamb
Trump’s “Syria “Minus Iran” Overture to Putin and Assad May Restore Washington-Damascus Relations
Kenneth R. Culton
Violence By Any Other Name
David Swanson
Why Impeach Donald Trump
Christopher Brauchli
Trump’s Contempt
January 23, 2017
John Wight
Trump’s Inauguration: Hail Caesar!
Mark Schuller
So What am I Doing Here? Reflections on the Inauguration Day Protests
Patrick Cockburn
The Rise of Trump and Isis Have More in Common Than You Might Think
Binoy Kampmark
Ignored Ironies: Women, Protest and Donald Trump
Gregory Barrett
Flag, Cap and Screen: Hollywood’s Propaganda Machine
Gareth Porter
US Intervention in Syria? Not Under Trump
L. Ali Khan
Trump’s Holy War against Islam
Gary Leupp
An Al-Qaeda Attack in Mali:  Just Another Ripple of the Endless, Bogus “War on Terror”
Norman Pollack
America: Banana Republic? Far Worse
Bob Fitrakis - Harvey Wasserman
We Mourn, But We March!
Kim Nicolini
Trump Dump: One Woman March and Personal Shit as Political
William Hawes
We Are on Our Own Now
Martin Billheimer
Last Tango in Moscow
Colin Todhunter
Development and India: Why GM Mustard Really Matters
Mel Gurtov
Trump’s America—and Ours
David Mattson
Fog of Science II: Apples, Oranges and Grizzly Bear Numbers
Clancy Sigal
Who’s Up for This Long War?
Weekend Edition
January 20, 2017
Friday - Sunday
Paul Street
Divide and Rule: Class, Hate, and the 2016 Election
Andrew Levine
When Was America Great?
Jeffrey St. Clair
Roaming Charges: This Ain’t a Dream No More, It’s the Real Thing
Yoav Litvin
Making Israel Greater Again: Justice for Palestinians in the Age of Trump
Linda Pentz Gunter
Nuclear Fiddling While the Planet Burns
Ruth Fowler
Standing With Standing Rock: Of Pipelines and Protests
David Green
Why Trump Won: the 50 Percenters Have Spoken
Dave Lindorff
Imagining a Sanders Presidency Beginning on Jan. 20
Pete Dolack
Eight People Own as Much as Half the World
Roger Harris
Too Many People in the World: Names Named
Steve Horn
Under Tillerson, Exxon Maintained Ties with Saudi Arabia, Despite Dismal Human Rights Record
John Berger
The Nature of Mass Demonstrations
Stephen Zielinski
It’s the End of the World as We Know It
David Swanson
Six Things We Should Do Better As Everything Gets Worse
Alci Rengifo
Trump Rex: Ancient Rome’s Shadow Over the Oval Office
FacebookTwitterGoogle+RedditEmail