More Than 30 Antitrust Experts Slam Comcast Merger

By Karl Bode, DSLReports

24 October 14

ritics of Comcast's proposed $45 billion acquisition of Time Warner Cable have heated up their assault on the merger, with more than thirty economics and antitrust law experts this week warning the FCC that the proposed merger would hurt competition and be a detriment to consumer welfare. According to the sixteen-page letter, the Comcast merger would give the cable giant control of 40% of the broadband market, and the leverage necessary to wage an aggressive anti-competitive war on both large and small competitors alike.

The professors are quick to bring up the government's blocking of AT&T and MediOne back in 2000 as legal precedent for blocking the Comcast deal outright. That deal too would have provided AT&T with 40% of the home broadband market at the time, and was blocked by the DOJ because the immense leverage would likely lead to anti-competitive behavior.

"By increasing Comcast’s leverage over OVDs (online video distributors), the merger, if allowed, would exacerbate competitive concerns similar to those in AT&T/MediaOne," the professors write. "Enhanced leverage would increase the likelihood of Comcast’s exclusionary conduct, and increase the likelihood that other broadband carriers would follow in kind."

A 40% broadband market share for a company whose usage caps continue to expand is a significant threat to both competition and emerging services, notes the authors. If Comcast can't use usage caps as a weapon, they'll likely use interconnection as a way to hinder online competitors, the authors insist.

"Comcast can extract payment for interconnection by allowing the routes into its network to congest, blocking or degrading an OVD’s access to a substantial share of its current or potential customers. There have been episodes of sustained congestion on Comcast’s network," states the authors. "When companies have paid to improve congestion issues, the congestion problems have gone away."

While Comcast has tried to argue that everyone from Google Fiber (whose small footprint isn't a real threat) and Hulu (which Comcast owns) will somehow magically keep Comcast honest, the professors are quick to pick apart that argument, quite correctly noting that competition from DSL is waning as AT&T and Verizon exit many markets, while wireless is no real substitute for fixed-line broadband competition.

Neither the DOJ or the FCC are expected to make their decision on the merger until sometime next year.

Antitrust Comcast