Regulators must consider more than market share in Comcast merger
Published: Tuesday, February 25, 2014
Updated: Tuesday, February 25, 2014 20:02
Comcast and Time Warner Cable agreed to a merger deal worth about $45 billion two weeks ago. Prior to the deal, Comcast was the largest cable and Internet provider in the country, with 21.7 million television and 20.6 million broadband subscribers. With the merger, they will be acquiring an additional 11.2 million television and 11.1 million Internet customers from Time Warner’s consumer base. With Comcast now possessing so much market share there has been concern as to what it will do to the industry and whether or not it is even legal. The issue isn’t so much monopolistic control as it is general influence and power.
Many have called the deal a violation of antitrust laws and a detriment to competition. However, Comcast plans on losing approximately 3 million subscribers which would give it a total television market share of about 30 percent, which may just be passable under current federal regulations. Also, Comcast and Time Warner own regional monopolies, meaning most people didn’t have the option of choosing Time Warner or Comcast to begin with and thus the merger technically doesn’t hurt competition in that sense.
What does become an issue is when one company has such a substantial amount of influence. With this deal Comcast will be able to throw its weight around more with content companies like CBS and Disney. Deals between cable and media companies have been relatively lackluster in the past few years, as well as scattered. With Comcast having so much of the market, it is possible they will be able to cut deals with more content providers given the appeal of their wide user base. It could potentially bring more content to their consumers, and also at a lower price considering Comcast has more leverage now. On the other side of the coin, Comcast could also charge Netflix more to stream to its consumers and that extra cost would inevitably get passed down to Netflix’s customers. One also has to be wary of Comcast possibly giving preferentially treatment to specific content, such as its internally owned studio, NBC Universal.
When evaluating the deal, federal regulators need to not only focus on the market share numbers, but also the overall impact of Comcast’s newfound leverage on the everyday consumer and on other content and service providers.