As Charter Communications, the fourth largest cable company in the U.S., continues to pursue its $80 billion takeover of fellow cable giants Time Warner Cable and Bright House, on Thursday a coalition of media justice, Internet rights and public interest groups delivered to the FCC over 300,000 comments in opposition to the merger.
If the merger succeeds the new entity would be second in size only to Comcast, and together with Comcast would control nearly two-thirds of the nation's highspeed internet subscriptions. Critics of such a scenario argue that this would give the media behemoths too much power in the already relatively noncompetitive broadband and cable markets, and would disproportionately hurt poor communities and people of color.
"This merger should be rejected — we need more options for affordable and open access to communications, not fewer." — Michael Scurato, National Hispanic Media Coalition
Charter Communications is "already swimming in debt" writes Dana Floberg of Free Press in an op-ed at The Hill. It will take on $27 billion in new debt if the merger goes through, saddling the new company "with a whopping $66 billion in debt," Floberg adds. Critics contend that this massive debt would be shouldered not by investors or the executives behind the merger, but by individual cable customers. The debt will add up to about $1,142 per customer, says Michael Copps, a former commissioner and acting chairman of the FCC who now serves as an advisor to Free Press.
"Charter has told investors it would exercise its expanded market power to pay off massive merger-related debt, which means substantial price increases are likely," Free Press argues in its petition for the FCC to reject the merger. While costs are likely to increase to cover that debt, critics argue that with such a large share of the market — in many places, the new company would be the only option for broadband service — the company would have little incentive to provide good, fast and efficient service to customers.
"The proposed Charter-Time Warner Cable merger represents the kind of noxious corporate takeover Demand Progress members and the public have continually spoken out against. It’s a deal between powerful, entrenched interests that would lead to bigger profits for ‘New Charter’ and higher prices for customers while diminishing competition and consumer choice," says David Segal, executive director of Demand Progress.
Free Press also argues that the merger would exacerbate the digital divide — further limiting internet access in impoverished communities.
"A merger between Charter Communications and Time Warner Cable is a bad deal for diverse communities in America," says Michael Scurato, vice president of policy at the National Hispanic Media Coalition. "Charter has not demonstrated that it is committed to hiring a workforce that reflects the communities they seek to serve, carrying culturally relevant programming for their diverse audience or fully participating in existing programs, like Lifeline, that could soon help bring communities of color online. This merger should be rejected — we need more options for affordable and open access to communications, not fewer."
"Allowing a corporation like Charter to become one of the few gatekeepers to the Internet will undoubtedly harm how those voices are heard, if they’re heard at all." — Steven Renderos, Center for Media JusticeCritics also argue that one company holding such an enormous market share would inevitably stifle innovations in cable programming and streaming services. The New York Times writes that U.S. antitrust officials have been analyzing "whether bigger cable firms — with strong bargaining power with programmers and fast-growing broadband Internet businesses — could harm their newest threat: streaming video providers like Netflix and Hulu."
As Floberg explains, "With monopoly-style market power, it could raise prices on captive customers and protect its existing cable-TV model by thwarting competition from online video services. There’s hardly any competition in the broadband market as it is. Many customers won’t have the option to take their business elsewhere should Charter start hiking rates and abusing its gatekeeper power."
Another coalition of media and telecommunications businesses and labor and public interest groups, including Dish Network, Fairpoint Communications, and the Rural Broadband Association, among others, have formed to oppose the merger, and central to their opposition is the potential for the merger to threaten independent programming. The Stop Mega Cable coalition warns of the power the new company would wield to "[f]orce independent and diverse voices to accept below-market terms, thus jeopardizing their viability."
Copps has noted that it is already difficult for independent programs and new, diverse voices to gain a foothold in a market controlled by only a handful of large cable companies. If only two corporations were to dominate two-thirds of the nation's access to cable TV, it would be that much more difficult for those voices to make their way to the national stage.
Such a merger also has the potential to inhibit the size and presence of independent voices online, notes Center for Media Justice senior campaign manager Steven Renderos. "The Internet has been a space for unique and diverse voices to be heard," argues Renderos. "Allowing a corporation like Charter to become one of the few gatekeepers to the Internet will undoubtedly harm how those voices are heard, if they’re heard at all."