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Gillmor reports: "Regulators and competition authorities are supposed to consider the public interest when looking at such deals. In no way does the public interest benefit from this one."

File photo, Comcast truck. (photo: unknown)
File photo, Comcast truck. (photo: unknown)

Comcast's Takeover of Time Warner Is a Horrible Deal for Consumers

By Dan Gillmor, Guardian UK

13 February 14


America already had little TV and internet competition. Unless the government vetoes this deal, there will be even less

s Comcast pushes regulators to approve its just-announced deal to buy out Time Warner Cable, it'll make one essential point: the acquisition won't visibly change the competitive landscape for TV and internet customers.

Nice try. Regulators and competition authorities are supposed to consider the public interest when looking at such deals. In no way does the public interest benefit from this one.

We're talking immense scale with this deal. Comcast - which completed its takeover of NBC Universal a year ago in a deal that never should have been allowed in the first place - is the nation's biggest cable company, with about 21m subscribers. Time Warner Cable, the second largest, has 11m. According to the Wall Street Journal, the combined company will sell off what amounts to 3m of those subscribers in order to keep its overall market share slightly below a mythical threshold that raises worries about too much market power.

The public interest is not served when a company that provides one-third of all cable TV service in America replaces two smaller ones (which were plenty big in the first place). It is not served when that company already owns one of the four major broadcast networks, a major movie studio, several cable channels (including CNBC, which will assuredly be boosterish) and other properties.

And the public interest is distinctly not served when what's already the largest and most important internet service provider becomes vastly more so. The cable companies, with their inherently better bandwidth than phone company DSL lines, are becoming natural monopolies for wired-line internet access except in the few places where other providers have installed fiber lines. As Om Malik, founder of the GigaOm technology news company, put it in a blog post, cable consolidation in this century "is all about broadband", which has high profit margins and doesn't have to deal with Hollywood.

America's cable companies grew up in the cozy embrace of local governments that gave them monopoly franchises, which they've expanded over the years via mergers and acquisitions, not just normal growth. The noncompetitive local franchise model means that when one cable giant buys another, the customers generally have the same choices as before for subscription TV (cable or satellite) and internet service (cable or phone company DSL).

Whose interest is served by such a deal? The shareholders of TWC and Comcast would be thrilled, for sure. So would the NSA and other surveillance statists, who would undoubtedly be happiest if we reverted to the era when a single behemoth telecommunications enterprise served, for all practical purposes, as an arm of the spy services.

The other main winners would be the remaining telecom "competitors" that would be part of an ever-cozier oligopoly of enterprises that upgrade reluctantly and, compared to providers in other developed nations, grossly overcharge their customers. So look for more mergers, even less user privacy, higher prices and - if this is possible for the generally loathed cable companies - even worse service.

Will the Federal Communications Commission and Justice Department veto this buyout? Don't bet on it. The cable industry's clout is enormous, and Comcast is the alpha dog in that pack.

After building a robust and open communications system that gave people more and more choices for information and entertainment, we have permitted - no, we've encouraged - corporate interests to peel away those choices. The new choke points are designed to enrich a few at the expense of the many, and to recentralize information as well as digital media innovation. Profits and power: that's the end game.

In a nation with a sane telecom policy, a Comcast could buy a Time Warner Cable with no pushback, because both carriers would have been required to share their natural monopoly with other internet service providers. We don't live in such a place, and someday soon we will deeply regret it. your social media marketing partner


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+5 # Walter J Smith 2014-02-13 15:32
This is an excellent article. Hopefully it will get plenty of attention.

Hopefully this insane merger will help us begin questioning our ungoverned consumerism as well as our ungoverned capitalism as well as our ungoverned "government."

Hopefully this will help us begin examining the crap feast we call television.

Hopefully this will call public attention to the fact that neither party cares one whit about "a sane telecom policy" or any other sort of sane governance.
+2 # Jingze 2014-02-13 20:35
Consumers don't count. All they represent is money in the pockets of the filthy rich. Monopolies are good. Democracy thrives on them.
+1 # RnR 2014-02-13 20:50
The FCC? You're kidding right? Michael Powell can give the whitewash speech.
+6 # Farafalla 2014-02-14 00:53
I have Time Warner cable account. If I am not paid up, they slow down the service so I can't watch TV on my Internet account. They do this even though I have an account. So one month of unpaid Internet brings my service to a crawl. And they're just getting started. They'll be able to slow my RSN connection if they don't like RSN.

Comcast is one of the most fiercely right wing Southern (Mississippi) based companies in the country. They helped and pushed the rigged votes that merged SAG and AFTRA. They are union busters. They oppose net neutrality.

These corporations are running roughshod over the public. We need political leadership that will break up monopolies, whether in banking or telephony. We're not getting that from the current crop of democrats.
0 # Tje_Chiwara 2014-02-14 09:32
I think we should simply make the big companies subject to the Hatch Act and that would even increase their probable market efficiencies (along the lines of Robert Bork's lifelong analysis which had some appeal) and provide bigger dividends to their shareholders, since all that lobbying money would have to go back into legitimate expenses . . . . When monopolies get big enough to abuse, then they should be treated like the quasi-governmen ts they are.
0 # RMDC 2014-02-14 10:26
Someday there will be just one TV and internet company that controls all communications that American have. This company will have very close ties to the NSA.

But the concept that corporate, for-profit media -- newspapers, TV, internet, etc. -- somehow constitutes a "free media" is really bogus. Corporations are actually worse stewards of the free media than governments are. They are driven by profits and there is more profit from junk information and entertainment than their is from careful reporting and dissemination of hard information.

The media-scape in the US is heading toward the style of NBC news, the most idiotic program on earth. The news-reader, Brian Williams, looks like a Ken Doll with a permanent surgically created look of worry on his brow. He's the perfect manikin for the mood of America. That's what we will be required to look at all day / every day.
0 # JSRaleigh 2014-02-14 12:13
Time Warner Cable already has a monopoly around here. Is that going to change with the Comcast buyout?
+3 # geraldom 2014-02-14 13:06
The fact that the FCC has not immediately rejected this proposal out of hand and is not claiming that it's "Dead On Arrival," or that a vast majority of our representatives in Washington have not done the same, should frighten everyone right now. And why has Obama kept curiously quiet on this matter?

The more concentrated the control over the telecommunicati on business becomes, the worse it will be for the Democratic Party, and, by necessity, it will force the Democratic Party to further morph into a mirror image of the Republican Party than it already has.
0 # RoseM 2014-02-15 08:02
For the people? Ha, for big business... Follow the MONEY!

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