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Regulation

CU Urges DoJ to Halt Comcast-TWC Deal

Consumers Union (CU), the policy arm of Consumer Reports, wants US federal regulators to put a stop to Comcast's planned acquisition of Time Warner Cable.

In a fresh filing Thursday, Consumers Union of U.S. Inc. said it "respectfully requests that the U.S. Department of Justice bring action to enjoin the proposed merger of Comcast Corp. and Time Warner Cable." Consumers Union has previously argued for action against the merger with the Federal Communications Commission (FCC) , the other federal agency in charge of reviewing the Comcast/TWC deal.

The arguments for and against the Comcast Corp. (Nasdaq: CMCSA, CMCSK) acquisition of a Time Warner Cable Inc. (NYSE: TWC) are well worn by now, but still worth reviewing as the clock ticks closer to a decision on regulatory approval. In its filing with the DoJ, CU echoes many of the points put forth by other opponents of the merger. CU argues that a combined Comcast/TWC would decrease competition in video and broadband, slow or block innovation by online video companies, impede innovation by equipment and platform providers and "reduce the quality and diversity of information sources and services to the public."

From a content perspective, the main concern from opponents is that the bigger Comcast gets, the more it will squeeze out smaller companies that can't compete for programming on the same scale. Additionally, some argue that the new Comcast, with 30% of US pay-TV subscribers, would have significant leverage over programmers, which won't be able to afford missing out on Comcast's audience. With the combination of fewer competitors and greater leverage over programmers, Comcast would, according to the argument, become a gatekeeper that decides what content Americans can and can't see, based on what's best for the MSO's business. (See In Cable We (Anti)trust and Is Dumb Pipe the Smart Move?)

On the broadband side, opponents say that consumers should have more choices for Internet service nationwide, not fewer. Comcast has repeatedly refuted that argument by saying that Comcast and Time Warner Cable do not compete against each other in any market today, thus competition would not be reduced as a result of the proposed merger. Consumers Union, however, responds by saying "By the logic of that narrow view, Comcast should be free to acquire all the cable and Internet service providers throughout the country in every market it does not already serve – amassing a nationwide monopoly."

For its part, Comcast continues to reiterate a long list of arguments in favor of the TWC acquisition. These include its assertions that a larger Comcast could extend its innovative services further; that Comcast has an established track record of supporting independent and diverse programmers; and that broadband competition would not be adversely affected because "every consumer in America will have the same number of choices among broadband providers after the transaction as before."

Regulators have now been examining arguments on both sides of the merger deal since early in the year, and the FCC is expected to present its decision in January, if there are no unexpected delays. The DoJ's timeline is a little less clear, but it is also expected to reach a conclusion in early 2015. Analysts largely predict that regulators will approve the acquisition, but approval won't come without significant public debate. Expect the rhetoric to continue heating up as 2014 closes out.

— Mari Silbey, special to Light Reading

KBode 10/6/2014 | 1:49:19 PM
Re: CU Late To The Party? I'd be very surprised if it's blocked. And yes, Comcast has presented a lot of "concessions," many of which they were already doing (adhering to neutrality rules that didn't do all that much) and really shouldn't be considered concessions. They proposed several conditions to get NBC-U approved, and even then had some problems meeting them.
kq4ym 10/6/2014 | 9:20:43 AM
CU Late To The Party? Consumers should be glad that Consumers Union is putting it's objections on the record, but as pointed out it may already be a done deal. Comcast/TWC have already made lots of proposed "concessions" to ease the worries of some objectors, and the government seems poised to accept the deal for political reasons if not for some valid reasoning as well. Maybe there will be some added stipulatons but the deal is probably pretty much sealed it would seem.
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