Cable merger merits government scrutiny
To Capital Region cable TV customers, Time Warner Cable has been about the only show in town for decades. And until competition from the likes of Dish Network, Verizon Fios and DirectTV — Internet and satellite TV providers — came along, subscribers were pretty much at Time Warner’s mercy when it came to rate hikes.
The competition has been good for consumers nationally, but somewhat sobering for Time Warner and another of the industry’s big players, Comcast, which has now proposed a marriage that would give the combined companies a dominant market share in 19 of the nation’s 20 biggest cities. And not just in pay TV, but in the growing and very much related high-speed Internet business.
Government regulators need to beware.
Because the two companies’ service territories don’t tend to overlap, subscribers might not notice any difference right away. Indeed, Comcast officials say the deal wouldn’t lead to lower rates. What they do say is it would lead to better customer service — which, of course, has long been an industrywide problem.
Clearly, the deal would give Comcast more control over the media companies it contracts with for TV programming (which is problematic if for no other reason than it owns one — NBC Universal — and logically could be expected to favor it over competitors). But cable companies have been squeezing their content providers, and vice versa, for years, and consumers
frequently seem to get caught in the middle.
Likewise, Internet services (that sell hard goods or do things like transmit music or video) that Comcast also deals in could suffer if Comcast raised their fees, or sabotaged their services so consumers would favor Comcast’s instead. This would be possible if the recent court decision rejecting the concept of “net neutrality” is allowed to stand.
Antitrust regulators need to look at the control issue very carefully before approving any deal. Not only should there be some assurances that a dominant Comcast will play fairly with the companies it deals with, but that consumers will realize some tangible benefits (i.e. lower bills) as well.