The Public Comcast/TWC Case Is Largely Irrelevant in the End

April 10th, 2014 by · 3 Comments

Well, it’s been an interesting week for the regulatory process that the Comcast/TW Cable merger will be mired in for a while. All the excitement in the news is what Business Week properly calls a sideshow, albeit an entertaining one. 

Senator Franken tried to throw a wrench in the works by pointing out that just a couple years ago when Comcast bought NBC Universal it labeled TW Cable as a competitor in numerous ways while now it is saying that they don’t compete anywhere at all. But we’re talking about the US Congress here, the irony in having them skewer someone else for stretching the same facts different ways to fit the party line du jour was lost on basically nobody.

Comcast’s official filing with the FCC this week was a fun read too. In it we learned that everyone imaginable benefits from this deal: better service, faster connections, more investment, superior consumer protection, more robust competition, greater innovation, you name it it’s in there and it’s good.  It may even cure cancer if we just get out of the way, but they seem to have left that bit out. I’m not saying any of it is evil, because frankly this is just what lawyers do. They make the best case they can while making sure not to help the other side.

Comcast spent quite a bit of time in its filing detailing why it has no bottleneck, no incentive to strong-arm any peering or transit partner, and no power to do such a dastardly thing anyway.  That it’s happened a few times already with the end result being Comcast getting more money than it did before wasn’t discussed, oddly enough.

But while I continue to feel that there is something substantial at stake here for the peering/transit world with this deal, I nevertheless find it hard to see a viable case for blocking it. The rise of video is changing the world of internet traffic, shifting the balance of power. That remains true whether Comcast gets bigger or not.

But in the end none of it matters. Unless something bizarre happens, the question of whether this deal gets done or not rests behind closed doors. The bureaucrats themselves and the lobbyists from all sides will do what they do, and most likely the deal will go through with some conditions. When it does, we’ll look at those conditions to tell us who won and who lost.


If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!

Categories: Cable · Internet Backbones · Internet Traffic · Mergers and Acquisitions

Join the Discussion!

3 Comments So Far

  • anonerama says:

    My favorite parts of the side show have been Comcast’s General Counsel, David Cohen, admitting that Comcast’s customer service has not been very good and his comments that the merger won’t result in lower costs.

    So much for the “public interest” standard, unless the DOJ has reinterpreted public interest to mean shareholders in a public company rather than the welfare of the general public.

    So, if I’m correctly reading between the lines, this deal is a complete horizontal merger with 100%+ savings (I say “plus” b/c the new company’s market power will not only generate synergy savings but market power margin improvement over content providers) going straight to the shareholders.

    It’s astounding that a more powerful public assault by the well-monied content community has not emerged.

    Given the cozy relationship between POTUS and David Cohen, it’s hard (although not impossible) to imagine the DOJ and/or FCC rejecting this deal.

    Has crony capitalism really evolved to the point where mega-merger managements no longer need to promise bureaucrats their proposed merger will result in lower consumer rates?

    If you want to lower your cable bill, you better do it through the wealth effect: Buy CMCSA stock and use the capital gains to to offset your inevitably higher cable bills.

  • Nope says:

    I hope you’re wrong, Rob. This deal is a disaster for consumers, and for countless others too.

  • Robert Grutza says:

    I concur with the other posters. Making a disaster like Comcast bigger, only makes for a bigger disaster. They are the most anti-consumer company I have ever had the misfortune of dealing with.

Leave a Comment

You may Log In to post a comment, or fill in the form to post anonymously.

  • Ramblings’ Jobs

    Post a Job - Just $99/30days
  • Event Calendar