Comcast Pushes Mega-Merger, But Critics Call It 'Unthinkable'
'These two firms have abysmal records of customer service and unseemly influence peddling.'
Top executives from Comcast and Time Warner faced questions from the Senate Judiciary Committee on Wednesday as they tried to argue that U.S. customers would somehow benefit from the $45 billion merger of the two cable giants, but critics of the deal are doing everything they can to warn lawmakers, the Justice Department, the FCC, and the general public that approval of the deal would be 'unthinkable.'
"Comcast and Time Warner can’t fool the American people, who are tired of sky-high prices, lousy customer service and too few companies controlling what they can watch or download. Combining the two largest cable companies would be anti-competitive, anti-consumer and just plain bad for America.” —Craig Aaron, Free Press
For all the arguments from Comcast executives, including executive vice president David Cohen, that improving the "consumer experience" is their motivating factor for taking over their rival, critics charge that market domination and profit are the only real factors. Comcast is currently the nation's largest cable provider and purchase of Time Warner, the nation's second-largest provider, would give it unparalleled market share.
In a letter sent to the FCC ahead Wednesday's hearing, over fifty public advocacy groups told the regulatory body that, “The Comcast-Time Warner Cable merger would give Comcast unthinkable gatekeeper power over our commercial, social and civic lives."
“Everyone from the biggest business to the smallest startup, from elected officials to everyday people, would have to cross through Comcast’s gates," the letter continued. "Given these clear and present dangers and the complete lack of any tangible benefits, it’s clear that the union of the nation’s No. 1 and No. 2 cable companies is not good for competition or in the public interest.”
Ultimately, lawmakers can weigh in on the decision, but the approval of the merger currently rests in the authority of the FCC and the Justice Department, overwhich the Senate Judiciary Committee as oversight authority.
According to Los Angeles Times columnist Michael Hiltzik writes, what the representatives from Comcast really said at the public hearings was "trust us."
Calling it beyond "plausible," Hiltzik says that describes Comcast's assertion that it can "enhance competition" by merging "the nation's biggest and second-biggest cable operators, creating a behemoth controlling nearly half of all high-speed Internet access in the country and reaching some 60% of all cable subscribers" as absurd.
"If you can wrap your mind around that, you'll be prepared to swallow the rest of their guff," he writes.
During testimony of his own, Gene Kimmelman, the president and CEO of the adovacy group Public Knowledge, undermined the logic and arguments of the cable companies by highlighting the intrinsic harm that will be done to cable and internet consumers if this deal goes through.
"Consumers are beginning to see exciting new online services that give meaningful alternatives to the excessive prices and poor service they've come to expect from Comcast and other providers," Kimmelman told the committee. "However, this merger would give Comcast the incentive and ability to stifle competition, thwart innovation from online services, and impose higher costs on rival video and online services, which will eventually be paid for by consumers. This merger would have dire consequences for innovative online service providers and for consumers."
Meanwhile, a coalition of media reform and advocacy groups—including Free Press, Common Cause, Consumers Union, Demand Progress, and others—touted a petition now circulating that calls on the FCC and Justice Department to scuttle the deal. So far, more than 400,000 customers and concerned citizens have signed on.
“Comcast has unleashed an army of lobbyists in Washington to win approval of this deal,” said Craig Aaron of Free Press. “But the cable giant can’t fool the American people, who are tired of sky-high prices, lousy customer service and too few companies controlling what they can watch or download. Combining the two largest cable companies would be anti-competitive, anti-consumer and just plain bad for America.”
And Todd O’Boyle of Common Cause said people across the country are saying "enough is enough" with poor service, high costs, and cable giants who consistently get their way in Washington at the expense of the public interest. “These two firms have abysmal records of customer service and unseemly influence peddling," he said. "A merger should be unthinkable.”
The letter sent earlier in the week and its list of signers follows:
Dear Attorney General Holder and Chairman Wheeler:
The proposed Comcast-Time Warner Cable merger would give one company enormous power over our nation’s media and communications infrastructure. This massive consolidation would position Comcast as our communications gatekeeper, giving it the power to dictate the future of numerous industries across the Internet, television and telecommunications landscape.
In the last four years, Comcast has raised its basic cable rates in some of its markets by nearly 70 percent, while Time Warner Cable has actually cut costs for consumers. But the higher prices and reduced choices that this deal would bring are just the tip of the iceberg.
This merger is, at its core, about broadband, the most profitable and fastest-growing segment of the cable industry. Comcast’s service area would cover almost two-thirds of the U.S., and it would be the only broadband provider that could deliver truly high-speed Internet and pay-TV services to nearly four out of every 10 U.S. homes. This union would give Comcast control over half of the nation’s next-generation broadband customers and more than half of the pay-TV/Internet-bundled subscribers.
The open Internet brings the promise of meaningful competition as it greatly reduces the gatekeeper power that incumbent cable, broadcasting and studio giants like Comcast-NBCUniversal have historically wielded. But this merger — taking place in the vacuum of regulatory oversight of our broadband-communications market — would give Comcast unprecedented control over the Internet. It would also pose a grave threat to media diversity.
Comcast has repeatedly flexed its corporate and political muscles to get what it wants, even if that has meant harming competition, consumers and communities. Around the country Comcast has fought community efforts to bridge the digital divide with municipal broadband networks. It has lobbied statehouses and local governments to undermine public, educational and government access television. It has blocked its customers’ Internet traffic. And it was fined for failing to fulfill the commitments it made to secure approval of its merger with NBCUniversal.
The Comcast-Time Warner Cable merger would give Comcast unthinkable gatekeeper power over our commercial, social and civic lives. Everyone from the biggest business to the smallest startup, from elected officials to everyday people, would have to cross through Comcast’s gates.
Given these clear and present dangers and the complete lack of any tangible benefits, it’s clear that the union of the nation’s No. 1 and No. 2 cable companies is not good for competition or in the public interest. We, the undersigned, representing millions of people from every state, urge you to block this merger.
Alliance for Communications Democracy
Broadband Alliance of Mendocino County
California Common Cause
Cambridge Community Television
Center for Media Justice
Chicago Media Action
Citizens for Sanity, Inc.
Committee for Media Access
Community Media Visioning
Fight for the Future
Future of Music Coalition
Harry Potter Alliance
Holiday Design Group
Independent Arts & Media
Institute for Local Self-Reliance
International Campaign for Responsible Technology
Journalism That Matters, Inc.
Media Literacy Project
Media Mobilizing Project
Media Working Group Inc.
National Alliance for Media Arts and Culture
National Headquarters Studio
National Organization for Women
New America's Open Technology Institute
Parents Television Council
Personal Democracy Media
Prometheus Radio Project
Sinsinawa Dominican Sisters’ Leadership Council
Sisters of the Presentation Dubuque, Iowa
Sports Fans Coalition
St. Paul Neighborhood Network
TURN — The Utility Reform Network
Women In Media & News
Women’s Institute for Freedom of the Press
Women’s Studies Research Center at Brandeis University
Writers Guild of America East
Writers Guild of America West