FacebookTwitterGoogle+RedditEmail

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

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.

 

 

 

More articles by:

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.

July 19, 2018
Rajai R. Masri
The West’s Potential Symbiotic Contributions to Freeing a Closed Muslim Mind
Jennifer Matsui
The Blue Pill Presidency
Ryan LaMothe
The Moral and Spiritual Bankruptcy of White Evangelicals
Paul Tritschler
Negative Capability: a Force for Change?
Patrick Bond
State of the BRICS Class Struggle: ‘Social Dialogue’ Reform Frustrations
Rev. William Alberts
A Well-Kept United Methodist Church Secret
Raouf Halaby
Joseph Harsch, Robert Fisk, Franklin Lamb: Three of the Very Best
George Ochenski
He Speaks From Experience: Max Baucus on “Squandered Leadership”
Ted Rall
Right Now, It Looks Like Trump Will Win in 2020
David Swanson
The Intelligence Community Is Neither
Andrew Moss
Chaos or Community in Immigration Policy
Kim Scipes
Where Do We Go From Here? How Do We Get There?
July 18, 2018
Bruce E. Levine
Politics and Psychiatry: the Cost of the Trauma Cover-Up
Frank Stricker
The Crummy Good Economy and the New Serfdom
Linda Ford
Red Fawn Fallis and the Felony of Being Attacked by Cops
David Mattson
Entrusting Grizzlies to a Basket of Deplorables?
Stephen F. Eisenman
Want Gun Control? Arm the Left (It Worked Before)
CJ Hopkins
Trump’s Treasonous Traitor Summit or: How Liberals Learned to Stop Worrying and Love the New McCarthyism
Patrick Bond
State of the BRICS Class Struggle: Repression, Austerity and Worker Militancy
Dan Corjescu
The USA and Russia: Two Sides of the Same Criminal Corporate Coin
The Hudson Report
How Argentina Got the Biggest Loan in the History of the IMF
Kenn Orphan
You Call This Treason?
Max Parry
Ukraine’s Anti-Roma Pogroms Ignored as Russia is Blamed for Global Far Right Resurgence
Ed Meek
Acts of Resistance
July 17, 2018
Conn Hallinan
Trump & The Big Bad Bugs
Robert Hunziker
Trump Kills Science, Nature Strikes Back
John Grant
The Politics of Cruelty
Kenneth Surin
Calculated Buffoonery: Trump in the UK
Binoy Kampmark
Helsinki Theatrics: Trump Meets Putin
Patrick Bond
BRICS From Above, Seen Critically From Below
Jim Kavanagh
Fighting Fake Stories: The New Yorker, Israel and Obama
Daniel Falcone
Chomsky on the Trump NATO Ruse
W. T. Whitney
Oil Underground in Neuquén, Argentina – and a New US Military Base There
Doug Rawlings
Ken Burns’ “The Vietnam War” was Nominated for an Emmy, Does It Deserve It?
Rajan Menon
The United States of Inequality
Thomas Knapp
Have Mueller and Rosenstein Finally Gone Too Far?
Cesar Chelala
An Insatiable Salesman
Dean Baker
Truth, Trump and the Washington Post
Mel Gurtov
Human Rights Trumped
Binoy Kampmark
Putin’s Football Gambit: How the World Cup Paid Off
July 16, 2018
Sheldon Richman
Trump Turns to Gaza as Middle East Deal of the Century Collapses
Charles Pierson
Kirstjen Nielsen Just Wants to Protect You
Brett Wilkins
The Lydda Death March and the Israeli State of Denial
Patrick Cockburn
Trump Knows That the US Can Exercise More Power in a UK Weakened by Brexit
Robert Fisk
The Fisherman of Sarajevo Told Tales Past Wars and Wars to Come
FacebookTwitterGoogle+RedditEmail