Opponents of Comcast’s $45 billion plan to buy Time Warner Cable smell blood following reports that Justice Department antitrust lawyers have serious concerns about the deal — and plan to meet with company reps tomorrow. Six of the mergers’ most vocal foes in the U.S. Senate sent a letter to Justice and the FCC today urging them to “take a stand for U.S. consumers and businesses” by suing to block it.
A combination “would lead to higher prices, fewer choices, and poorer quality services,” says the letter from Democrats Al Franken (Minn.), Ed Markey (Mass.), Ron Wyden (Ore.), Elizabeth Warren (Mass.), and Richard Blumenthal (Conn.) plus independent Bernard Sanders (Vt.).
With TWC, Comcast would control over 57% of the broadband market and 30% of cable TV, the letter says. That would give the Philadelphia-based power “an ability to defeat competing TV and Internet companies and stifle American innovation across the industry.” Since Comcast also owns NBCUniversal, it “would have incentives and means by which to extract higher prices from other multichannel video programming distributors and prioritize its own programming over that of competitors.”
The Stop Mega Comcast Coalition — whose members include Common Cause, Consumers Union, Dish Network, the Parents Television Council, and the Writers Guild — praised the letter. The group says it will “continue to work with law enforcement agencies and legislators to demonstrate how this deal undermines the public interest by reducing competition and discouraging innovation.”
One member, the Sports Fan Coalition, separately noted that Comcast could wind up dominating 18 of the 20 largest sports markets, giving it “the leverage and incentive to restrict access to regional sports programming, strong-arm independent or unaffiliated programmers out of the market, and further endanger fans’ ability to enjoy their local teams.”
Comcast counters that the deal would leave it serving “less than 30% of the video market, and only about 30 million of the 87 million broadband subscriptions in the US.” TWC subscribers would be better off with twice as many VOD options and faster broadband service. That could result in “more competition for businesses that economists estimate will save $8 billion for consumers.” What’s more, the combination would open additional markets to “the country’s best broadband adoption program for low-income Americans…These benefits all come with no reduction in competition for consumers.”