TWComcast. A monster is born.

Today brought bad news on the cable company front. Comcast has proposed to buy Time Warner Company for $45.2 million. While the merger needs federal approval before it can go through, it looks like the marriage between the two cable giants is all but official.

Company mergers are dry. The whole darwinian model of business doesn’t exactly captivate the minds of young TV watchers, but this is big news. According to an article on Gizmodo, Comcast has the largest number of customers of any broadband company  in the US, clocking in at 20 million subscribers (Barrett, 2014). TWC is half the size, but by joining forces with Comcast, the two cover huge parts of the East Coast and Midwest and have a solid core along the Pacific. As Brian Barrett explains, that’s “half of all paying cable-TV-phone customers in the United States” (2014). TWC and Comcast want to double up their reinforcements to reassert their power.  Online streaming is both a threat and an opportunity for these companies. They may be losing viewers to Netflix, but we pay them for the streaming capabilities. Joining forces just means these companies can rake in more money. 

Photo courtesy of Steve Garfield, Flickr

Photo courtesy of Steve Garfield, Flickr

As soon as I heard this news, my red flag went flying. I was ready to cite the 1996 Telecommunications Act in any way possible. Except, as Barrett pointed out, the FCC may not be my savior this time (2014). The two cable companies don’t have overlapping coverage, so they’re not monopolizing the market in any specific area (just the country). The FCC doesn’t have to act and most likely won’t  because one of their former board members was a top lobbyist for the cable industry (Barrett, 2014).

But the thing that frightens me the most is what this all means for the recent net neutrality ruling. A month ago, a federal appeals court struck down an FCC regulation that forced internet service providers to treat all web traffic equally. Comcast as been sued over this before, but this time, Verizon made the case that the FCC was over regulating (Hu,2014). With the the potential Comcast/TWC merger, customers have a bit of a grace period. Comcast signed an agreement in 2011 to uphold net neutrality until 2018 (Siner, 2014). But then what happens? We could have fewer cable and broadband companies to choose from, and on top of that, they could be limiting our access to various websites. 

At the heart of all this is us, the lowly internet users and cable watchers. This merger could change nothing. Or it could mean that our variety vanishes. With less competition, at least from a capitalist view point, Comcast and TWC have no reason innovate. There’s no push for lower prices or better customer service. The new mega-company can get dirt-cheap content to the determent of our creative community. So we’re left with a smaller media diet and a more homogenized society. We’ve become used to the freedom of information provided by the internet. It’s scary to think that big money may mean another bit of our personal freedom has been chipped away. 

References:

Baker, L. (2014, February 13). Comcast take over of time warner company to reshape us pay tv. Reuters. Retrieved from http://www.reuters.com/article/2014/02/13/us-comcast-timewarnercable-idUSBREA1C05A20140213

Barrett, B. (2014, February 13). Why the comcast-time warner cable merger is worse than you think.Gizmodo. Retrieved from http://gizmodo.com/why-the-comcast-time-warner-cable-merger-is-even-worse-1522096469

Hu, E. (2014, January 14). Fed can’t enforce net neutrality: what this means for you. National Public Radio. Retrieved from http://www.npr.org/blogs/alltechconsidered/2014/01/14/262454310/feds-cant-enforce-net-neutrality-what-this-means-for-you

Siner, E. (2014, February 13). How the big cable deal could actually boost open-internet rules. National Public Radio. Retrieved from http://www.npr.org/blogs/alltechconsidered/2014/02/13/276453747/how-the-big-cable-deal-could-actually-boost-open-internet-rules

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4 thoughts on “TWComcast. A monster is born.

  1. The really scary thing is that these companies are HUGE! You mentioned the coverage of the US that they encompass and couple that with the fact that their money pool will be enough to buy up smaller companies without issue. Then you have both right now having been proven to be throttling internet speeds.

    All of that combined is scary and terrible. Even the EU is saying that American internet rules are ridiculous and they don’t want to go down that road. Nice post! This whole merger makes me a bit angry.

    Like

  2. Honestly, I hadn’t even heard of the merger before reading your post, and I definitely wouldn’t have understood the consequences, so thanks for explaining all of this in a clear, concise way. I completely agree: this merger is super scary. And though I don’t agree with it at all, I will say one thing: These companies are super smart. What a great solution. You’re losing viewers to Netflix, so you get your money when people pay you for streaming capabilities. Very smart and sneaky, in a shady sort of way.

    Like

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