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Comcast-Time Warner Doesn’t Pass the Smell Test
One thing is certain about Comcast’s proposed $45 billion merger with Time Warner Cable: It doesn’t pass the smell test. Comcast claims that the combination of the number one and number two cable companies will somehow enhance rather than diminish competition and lead to greater consumer satisfaction. Don’t worry, Godzilla will play nice on the playground.
The resulting company would have at least 30 million cable customers, just under 30 percent of the TV market, as well as 38 percent of high-speed Internet customers. It will have virtual monopoly cable control over news and public service programming in cities like Chicago, Los Angeles, Philadelphia, New York City and Washington, D.C. It will be able to exact price concessions from content providers, forcing some out of business, limiting innovation and variety. With net neutrality rules now under assault, it will be positioned to charge discriminatory rates for high-speed access or to discriminate against Netflix and other companies seeking to stream over its cable. And Comcast will be in position to decide what gets priority access and what viewers across much of the nation won’t see.
Comcast is just digesting its previous mega-merger, the takeover of NBC Universal that should have been blocked by the Federal Communications Commission (FCC). That leaves Comcast controlling an empire that includes NBC, CNBC, MSNBC, USA Network, Telemundo and other networks.
Here the merger doesn’t just impact the marketplace of cable; it threatens the marketplace of ideas. The protection of free speech under our Constitution depends on citizens having access to many ideas, many sources, many ways of getting ideas and information. Letting mega-corporations consolidate control of key parts of the media infrastructure is a direct threat to that access.
In addition, consumers surely will get fleeced if the merger goes through. America already suffers from worse Internet service, speed and affordability than other developed countries. As Craig Aaron, president of the consumer advocacy group Free Press, summarized: “No one woke up this morning wishing their cable company was bigger. This deal would be the cable guy on steroids — pumped up, unstoppable and grasping for your wallet.”
Comcast is already infamous for its lousy customer service. Among the most visible companies, Comcast ranks down with BP, AIG and Bank of America as one of the 10 least reputable companies in the United States, according to Harris Interactive’s annual “Reputation Quotient” survey. In the American Consumer Satisfaction Index, Comcast had the fourth-worst consumer satisfaction in the country.
On its face, this is a preposterous merger and a threat to the marketplace of ideas. Former FCC Commissioner Mike Copps is precisely right when he says of the takeover: “This is so over the top that it ought to be dead on arrival at the FCC.”
Only don’t discount what may be Comcast’s greatest strength. Its wireless is slow; its cable service lousy. But Comcast is wired politically. Its chief executive, Brian Roberts, has golfed with President Obama on Martha’s Vineyard. Its chief lobbyist, David L. Cohen, raised $1.2 million for the president in a Philadelphia fundraiser in 2011.
And Comcast is a poster child for Washington’s corrupting revolving door. One of its lead lobbyists – officially the senior vice president for government affairs of its subsidiary NBC Universal — is Meredith Attwell Baker. Appointed by President Obama to hold a Republican seat on the FCC, she voted to approve Comcast’s takeover of NBC and then joined the newly merged company a mere four months later after only serving two years of her five-year term.
The door revolves the other way, too. William Baer, who recently became head of the Justice Department’s Antitrust Division, represented General Electric and NBC Universal in their deal with Comcast. Maureen Ohlhausen, one of four sitting commissioners on the Federal Trade Commission, which is charged with enforcing antitrust laws, provided legal counsel to Comcast before assuming her post.
So blocking the merger, which should be a no-brainer, will require an aroused public opposition. Consumer groups and media watchdogs as well as progressive groups are mobilizing to oppose the merger. Seattle Mayor Ed Murray has announced his opposition and vowed to review the city’s franchise agreement with Comcast. Other mayors should follow his example. Sen. Al Franken, who has been a stalwart guardian of free speech, has already raised objections in a letter to the FCC and the Justice Department.
The United States already has suffered the ravages of “too big to fail” banks, curbed neither by market nor by law. The last thing we need is consolidated communications monopolies, constricting the marketplace of ideas while gouging captured consumers.