Comcast defends $45B Time Warner merger

Comcast is making the case this week for regulators to approve its proposed $45 billion merger with Time Warner Cable.

In meetings with the Federal Communications Commission (FCC), Comcast Executive Vice President David Cohen and others from the company pushed back on critics’ claims that the merger would hurt competition, according to new filings at the agency.

{mosads}Comcast challenged on a common criticism that the merger would allow it too much power in the Internet and cable markets.

Online video company Netflix has been vocal in opposing the proposed merger, espressing concerns that Comcast’s increased market share for Internet service would mean the cable giant would have more power to charge websites for better access to users.

Earlier this year, Netflix and Comcast reached an agreement through which Netflix can directly connect to Comcast’s servers in the hopes of boosting the streaming experience for users. While Comcast said the deal benefits both companies, Netflix CEO Reed Hastings publicly bashed the agreement, saying Netflix is being forced to pay an “arbitrary tax.”

In the meetings at the FCC, Comcast repeated its commitment to the agency’s largely defunct net neutrality rules — a condiction of Comcast’s merger with NBCUniversal in 2011 — and said the merger would not harm broadband competition.

Comcast would control 35.5 percent of the market for wired Internet service if the merger were approved, the company said, citing 2013 data from the FCC.

Regardless, “the focus on national broadband share is misguided,” and the agency should be looking at competition among Internet providers in each market, Comcast said.

“Broadband competition depends on the choices available to each household at the local level,” the company wrote, repeating its frequent defense that Comcast and Time Warner Cable do not currently compete in any markets, meaning no consumer would lose an option for wired Internet service if the deal is approved.

In the cable market, Comcast has committed to selling off cable systems in certain places to remain below a now-defunct 30 percent market cap set by the FCC.

In another effort to combat concerns that Comcast could use its resulting cable market share to strong-arm video programmers, especially small companies, Comcast pointed to the “significant bargaining leverage” video programmers currently have, as well as Comcast’s “stellar record” of providing a range of video content.

“Comcast strives to offer a wide variety of compelling content for our customers in various packages and at various price points, while also balancing financial costs, opportunity costs, consumer demand, and available bandwidth, among other considerations,” the company wrote.

Comcast urged FCC officials to evaluate the specifics of the proposed deal, not critics’ concerns about broad industry consolidation.

“While some commenting parties will likely raise concerns regarding industry consolidation generally, the Commission’s review of license-transfer proceedings should focus on transaction-specific issues and on protecting competition, not competitors,” the company said.

Tags Comcast Federal Communications Commission NBC Universal Netflix Network neutrality Time Warner Cable
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