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Comcast-Time Warner Cable Deal: Bad For You, Bad For Everyone
Washington, D.C. (February 13, 2014) - If approved by federal regulators, Comcast's $45 billion purchase of Time Warner Cable will give the company unprecedented power in the media world and possibly trigger another big merger among TV providers.
Comcast, which reported it had 22 million video subscribers at the end of 2013, will add Time Warner Cable's 11 million video subscribers in the deal. Although Bloomberg News writes that Comcast may sell three million of TWC's video subs to Charter, which also wanted to buy the cable operator, it would still leave Comcast with roughly 30 million video subscribers.
In addition, Comcast, already the nation's largest cable operator, would then have cable systems in Los Angeles, New York, Washington, D.C., Chicago and Philadelphia, among other large cities. The massive number of subscribers in so many key markets would make it difficult for any programmer to get tough with Comcast in programming renewal negotiations.
If a programmer couldn't renew its contract with Comcast -- and was forced to remove its signal from the cable operator -- it would mean the loss of more than 30 million viewers overnight. While programmers say they always want a fair value for their signals, they would likely have to be more flexible when talking with Comcast.
Consequently, the programmers would likely put greater pressure on other TV providers, such as Dish and DIRECTV, to pay high fees to carry their channels. This in turn could prompt Dish and DIRECTV to seriously consider its own merger, which would create a satellite company with more than 30 million video subscribers, to create more leverage in programming disputes.
Finally, Comcast, which also owns NBC Universal, an Internet service, and other media-related properties, could wield its greater power against the nation's video streamers, such as Netflix. With a court recently striking down the Net Neutrality rules, which prevented an ISP from discriminating against web companies, Comcast could tell a company like Netflix that it better pay what we want to keep streaming your content to our customers or else. The or else? Netflix could be prohibited from streaming to Comcast Internet subscribers.
If you're a consumer today, the prospect of Comcast accumulating even more power should have you shaking in your boots. Undoubtedly, Comcast subscribers would see higher fees to help pay for the company's various endeavors. And non-Comcast subscribers will likely have to pay more to keep up with Comcast.
And if you're a satellite TV subscriber, you may soon have only one choice in a provider, which also could lead to higher prices.
Bottom line: If the FCC approves the deal, it will be bad for you. It will be bad for everyone.
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