& cplSiteName &

Comcast's TWC Coup: 3 Things to Know

Mari Silbey
2/13/2014
50%
50%

Comcast has never been short on ambition. So, for a moment, don't consider whether there will be regulatory pushback on its deal to buy Time Warner Cable. Consider only what the new Comcast empire will look like and how its rule over the US TV and Internet landscape will affect the masses. (See Comcast Strikes $45B Deal for TWC.)

No. 1. Video subscriber numbers
Comcast Corp. (Nasdaq: CMCSA, CMCSK) has said it will divest itself of 3 million subscribers of the combined company once it closes on the Time Warner Cable Inc. (NYSE: TWC) acquisition. With a net gain of 8 million subscribers, that would bring Comcast's total subscriber count to an estimated 30 million video customers, or approximately 10 million more customers than its closest competitor.

DirecTV Group Inc. (NYSE: DTV) rings in with just over 20 million US subscribers, while satellite TV rival Dish Network LLC (Nasdaq: DISH) has 14 million customers. Telecom competitors AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) have 5.5 million and 5.3 million TV subscribers, respectively. The closest cable company, Cox Communications Inc. , weighs in with about 4.5 million video subscribers.

The Proposed Comcast-TWC Goliath
If consummated, the proposed Comcast buyout of TWC would give the combined company control over huge swaths of the US, especially east of the Mississippi. This map from Mosaik shows the Comcast cable systems in red and the TWC systems in blue.
If consummated, the proposed Comcast buyout of TWC would give the combined company control over huge swaths of the US, especially east of the Mississippi. This map from Mosaik shows the Comcast cable systems in red and the TWC systems in blue.

No. 2. A programming power shift
The combination of Comcast and Time Warner brings more ammo into the combined cable company's court for content licensing negotiations. While content is still king, Comcast will enjoy huge leverage with programmers through its more massive audience reach. The threat of a TV programmer blackout becomes much less potent when you consider that broadcasters would have to withhold their content from nearly one-third of all US consumers. Comcast's sheer size will keep retransmission fees in check.

No. 3. A clear technology agenda
The cable industry is undergoing a major technological transformation. From the evolution of its underlying infrastructure to the shift in the devices that consumers use to connect to cable content, the wave of change is already having an extraordinary impact on the cable ecosystem.

Comcast has been driving the technology agenda in recent years with initiatives like the Reference Design Kit (RDK) and the Converged Cable Access Platform (CCAP). But the merger with Time Warner Cable will give it further influence in determining how technology changes get done. The transition to IP video delivery? Comcast will be in the driver's seat.

— Mari Silbey, special to Light Reading

(13)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
gconnery
50%
50%
gconnery,
User Rank: Light Sabre
2/14/2014 | 7:49:55 PM
Re: Tarnishing content's crown
So many angles to this...

I assume this will get approved, simply because Comcast and Time Warner don't really compete in very many locations.  And presumably they're planning to sell those off?  What are the 3 million?


Yet at the same time it will increase Comcast's power over content providers.  As others have speculated, if you're not willing to do a deal with Comcast agreeing not to provide your content to OTT companies how are people going to see you?

This *could* help to hold prices down.  Certainly Comcast should be in a better position to negotiate carriage fees with content companies.  Of course keeping Comcast's fees in check doesn't mean they'll be lowering our bills, but it might help to reduce the rate at which cable TV bills have been going up.


*Maybe* the FCC will negotiate some terms like network neutrality or something into the agreement.  Won't last forever of course, but better than nothing.

Does this mean the end of SDV?  TW deploys it all over the place, Comcast mostly does not.  Customers with TiVo or some other CableCARD solution hate the thing.  Will TW switch their technology (in the next decade say) to be more like Comcast?

Certainly this increases Comcast/TW's power in negotiations with Motorola/Cisco/Pace etc for STBs and back end equipment now that they are larger.  Expect cheaper STBs that we rent for the same price and aren't any better than what we have now.
KBode
50%
50%
KBode,
User Rank: Light Sabre
2/14/2014 | 8:50:48 AM
Re: Tarnishing content's crown
I think the one-two punch of a company with the kind of massive scale necessary to to strike uncompetitive licensing deals keeping content out of the hands of streaming competitors -- combined with a company that controls the conduit to the home and can increasingly impose usage caps designed to hinder streaming competitors -- is a pretty bad scenario.

I do think it will get approved by regulators however, with a few highly theatrical conditions applied to give the pretense of control.
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
2/13/2014 | 9:34:18 PM
Re: Tarnishing content's crown
Putting Comcast in the "driver's seat" may prove to be an unwise decision for consumers as well as for the industry as a whole. Letting one large concern take over such a large market often gives the greed factor a great place to breed. Technology may or may not speed along once a monopolistic scenario happens.
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
2/13/2014 | 9:32:19 PM
Comcast's TWC Coup: 3 Things to Know
@Carol:  I am with you, this has "monopoly" written all over it.  As they further define and shape the market, there will be fewer competitors.  Being the only game in town is no good for anyone.

DHagar
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
2/13/2014 | 9:20:46 PM
Re: Tarnishing content's crown
Yes -- absolutely, a Freudian slip. Good catch, Dan. 
DOShea
100%
0%
DOShea,
User Rank: Blogger
2/13/2014 | 8:59:40 PM
Re: Tarnishing content's crown
I think you had a Freudian slip there - "aggravating" instead of "aggregating."
Carol Wilson
100%
0%
Carol Wilson,
User Rank: Blogger
2/13/2014 | 6:15:57 PM
Re: Tarnishing content's crown
The problem is that Comcast can argue -- and document - cable's dimishing share of the video business, It was down to 60% in 2012, due to share lost to satellite and telco providers. 

It may easier for regulators to question the wisdom of aggrevating so much broadband power in a company that also competes on the content side and has great incentive to make life difficult for OTT providers. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/13/2014 | 6:12:46 PM
Re: Tarnishing content's crown
This is a bad idea for the cable and Internet broadband market. It reduces choice and competition. 
KBode
50%
50%
KBode,
User Rank: Light Sabre
2/13/2014 | 5:22:13 PM
Re: Tarnishing content's crown
Yes I think that's probably about right. :)
Carol Wilson
100%
0%
Carol Wilson,
User Rank: Blogger
2/13/2014 | 5:20:49 PM
Re: Tarnishing content's crown
I think the New Yorker pretty much summed up how this will work for consumers:

http://www.newyorker.com/online/blogs/borowitzreport/2014/02/a-letter-from-comcast-and-time-warner-cable.html
Page 1 / 2   >   >>
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
MWC 2017's Key 2-Letter Terms

2|20|17   |   08:29   |   (1) comment


5G, AI, VR... these are just some of the two-letter terms that will dominate show-floor chat at MWC 2017 in Barcelona, according to these two blow-hards (a.k.a. Scott Bicheno of Telecoms.com and Light Reading's Ray Le Maistre). And then there's PB...
LRTV Interviews
Key Trends for Mobile Operators in Developing Markets

2|20|17   |   06:37   |   (0) comments


Ovum's Matthew Reed talks to Scott Bicheno from Telecoms.com about the challenges and opportunities facing mobile operators in the developing markets of Africa and the Middle East.
LRTV Documentaries
YouTube Takes on Facebook Live-Streaming

2|17|17   |     |   (0) comments


Popular 'YouTubers' will be the first to get the new service on their smartphones. You have been warned.
LRTV Custom TV
Open Source NFV/SDN Automation

2|17|17   |   05:54   |   (0) comments


AT&T ECOMP (Enhanced Control, Orchestration, Management and Policy) code is transitioning into the Linux Foundation for placement into open source. In this video, Carol Wilson provides an update on the maturation of open source ECOMP and meets with industry leaders from AT&T, Bell Canada, Orange, Linux Foundation and Amdocs to discuss what this means for the ...
LRTV Documentaries
Uber & NASA Collaborate on Flying Car Project

2|16|17   |     |   (0) comments


Is Uber for real? Well, it's hired NASA engineer Mark Moore to lead the project, and he wouldn't come cheap.
LRTV Documentaries
Zuckerberg Tries Out the Oculus Rift VR Glove

2|15|17   |     |   (0) comments


Facebook CEO shows off a new way to interact with the Oculus Rift virtual reality headset: an Oculus glove.
LRTV Custom TV
Huawei Digital Transformation Forum 2017

2|10|17   |     |   (0) comments


Here's a preview of the upcoming Huawei Digital Transformation Forum taking place in Barcelona with trending telecom topics like cloud, IoT, 5G and much more!
Telecom Innovators Video Showcase
Dan Sahar of Qwilt on Open Edge Cloud Platform

2|8|17   |   08:38   |   (0) comments


Dan Sahar, Qwilt's co-founder, sits down with Steve Saunders of Light Reading for a conversation about Qwilt's Open Edge Cloud platform and the new role of service providers in application and content delivery.
LRTV Documentaries
ZeroStack's 'Self-Driving Cloud'

2|7|17   |   01:09   |   (0) comments


Its Z-Brain tech automates day-to-day management and long-term planning for hybrid clouds.
Telecom Innovators Video Showcase
Nominum's Craig Sprosts on DNS & Cybersecurity Trends

2|7|17   |     |   (0) comments


Nominum's Craig Sprosts talks about the fast-changing landscape of cybersecurity with Steve Saunders of Light Reading. Sprosts touches on the trend of the rise of ransomwares, rivals of IoT base attacks, and mobile network security. He also discusses the realization of the importance of IoT security after a recent cyber attack that paralyzed several major ...
LRTV Documentaries
China Moves Towards Mixed Ownership of Telcos

2|1|17   |   01:10   |   (0) comments


Chinese authorities are promoting new ownership models in order to raise capital.
Shades of Ray
What to Expect at MWC 2017

1|31|17   |     |   (0) comments


5G is set to dominate as the key buzz term at this year's Mobile World Congress but there are other pressing 4G matters to address.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
T-Mobile CEO: M&A Coming but Not Quite Yet
Dan Jones, Mobile Editor, 2/14/2017
Is the Time Right for a Cisco/Ericsson Wedding?
Ray Le Maistre, Editor-in-chief, 2/17/2017
Nice to See at Least One CSP Taking My Advice
Mitch Wagner, Editor, Enterprise Cloud, 2/17/2017
Charter Launches 5G Field Trials
Mari Silbey, Senior Editor, Cable/Video, 2/16/2017
WiCipedia: Fintech Flexibility, Snap Missteps & Women of Wearables
Eryn Leavens, Special Features & Copy Editor, 2/17/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.