Apologies in advance if I sound irked or irritated, but you'll know why in short order. Remember the posts about the repeal of Net neutrality regulations, and the follow-up discussion of how it's just getting worse? Well time to pile more on the heap! On Wednesday of this week, news started flying around that Comcast is in a shares-only (meaning no cash involved) bid to buy Time-Warner cable for $45 billion, which would result in what is easily the largest cable company *and* ISP in the country, covering approximately 80 million customers.
Anyone want to guess my opinion on this? Anyone at all? You don't need to guess because you already know! I'm not sure where to begin in my criticism of this, it stinks on all levels. First, it would create an absolutely massive monopoly of sorts right after the nullification of the Net neutrality regulations. It scares me to think of the control that would hand to this new entity. I had the same issues way back in 2000 when AOL bought Time-Warner in a $160-billion stock-only deal - which was an absurd price especially back then - to form what was at that time the largest entertainment company on earth. The problem I had with it is that that single company would control the entirety of your experience; the content you viewed, the software you used to view it, the channels on which the content was carried, almost every aspect of your TV/Internet experience would be controlled by them. The companies have since parted ways, especially since it was a bad deal to begin with.
Companies controlled by AOL-Time Warner post-merger
Now, this. We already have the concerns about Comcast throttling Netflix, which is a competitor to Comcast-invested Hulu. They also acquired NBC-Universal last year for $45 billion further cementing their monopoly and control over the industry, and the FCC chairman, Tom Wheeler, who will be a significant part of the approval process of the merger was once the cable industry's most powerful lobbyist, which is why it's no surprise he's not too keen on issues like Net neutrality. Comcast also wants to muscle in on Netflix with their own streaming service, which I wouldn't have a problem with except for one major issue: Netflix doesn't control the channels over which their content is delivered. Comcast does. Comcast could throttle Netflix to give themselves an advantage, but not the other way around. To play devil's advocate, one of the reasons cable companies feel the need to do this is because of the record number of people cutting their cords, and that article is from 2011! In fairness, 4th quarter 2013 is the first time in six years those numbers didn't increase for Comcast.
On top of all of this, the EU is now saying it wants one of the major Internet regulatory agencies wrested from U.S. control. I see their perspective, but that could set the Internet back 30 years.
There is still some hope. Comcast will likely be forced to include agreements assuring it will practice Net neutrality, at least for the near future, as an extension of similar agreements it made when it acquired NBC-Universal. Additionally, there has been a lot of unwillingness on Capitol Hill regarding the potential merger between AT&T and T-Mobile, although strangely enough, that one doesn't bother me. It would be good for both companies, since neither is in the overly-powerful position Comcast is. So it may face significant scrutiny, although lawmakers don't actually get to say one way or the other if the deal goes through.
All these issues are so serious it actually makes me feel a little sick. I try to be open-minded and see things from all perspectives, but it seems pretty clear to me - and this is just my own point of view - that this whole thing is a control and monopoly issue, and the FCC chairman's waffling on the related issues is because of his previous ties to the cable companies.
I'll keep hope alive, perhaps there will be a positive outcome, and we won't know the results for months. Fingers crossed.
I do not think that this merger should be allowed, just like the AT&T merger with T-Mobile was not allowed. It would create a huge monopoly in the cable industry, and I for one do not want Comcast to be in full control of my TV and Internet usage. I definitely think it is Comcast's goal to become a larger and larger monopoly, and thus far they have been getting away with it. They know exactly what they are doing. I too will keep my fingers crossed in hopes that the FCC does not allow this merger to occur
ReplyDeleteProfessor,I agree with you on this one. I haven't had cable television for six years. I was able to cut the cord with great success. This merger threatens my savings. I don't think people are strong enough to walk away from TV. I think that will be the only way to get their attention.
ReplyDeleteI think that these mega companies are harmful to the consumer. Prices go up and service goes down. I had cable installed when I moved her nearly a year ago and for the first six months, we had nothing but problems. I would call and complain about my service not working and they would come out and "fix" the problem only to have it re-occur in the next few days. Without competition, the costs of cable will continue to rise and the service will continue to fall. Right now, the only choice I have is to pay the high rates or cancel the service.
ReplyDeleteRoger,
DeleteI agree that as a company grows and knows that they have market control the quality of service declines in a hurry. I previously had cable, not only was my service poor but they damaged the smart panel in my house and I ended up having to file a claim with my home warranty company and the investigations department at the cable company. I was also paying inflated prices for all that service too! This is something that would definitely be harmful to the consumer. In a economy where consumer options and “fairness” are consistenly being brought up in healthcare, banking, lending, etc. Services should have to be as well.
Isn’t this comparable to when Microsoft created a monopoly with web browsers back in the late 90’s? The government was sure to shut that down ordering a breakup and hopefully they will with this too. Consumers cut ties with cable and satellite because the costs were too high; it was bad enough that in the Las Vegas area Cox was your only cable option. So now that other services like Netflix have taken off they’re going to find a way to control prices on these options or potentially create inconveniences for those who elect different services. I personally subscribed to Hulu and promptly cancelled it because Netflix had better options, more season episodes, and was overall faster at downloading and searching. This definitely isn’t fair to the consumer that one company has all the control; monopoly is written all over it. One can hope this gets shut down.
ReplyDelete