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Consumer Advocates Warn Against Comcast-Time Warner Merger


It's MORNING EDITION, from NPR News. I'm Renee Montagne.


And I'm Steve Inskeep. Business analysts, regulators and consumer advocates are debating what to make of a major change in the world of cable TV. As we've been reporting this week, Comcast and Time Warner Cable say they want to merge.

MONTAGNE: The proposed $45 billion deal would bring together more than just the nation's two largest cable companies; it would also unite two of the country's largest providers of Internet access.

INSKEEP: Consumer advocates warn that could lead to slower broadband speeds, and less competition in the fast-growing world of online video. NPR's Joel Rose reports.

JOEL ROSE, BYLINE: If you're a Time Warner Cable customer, this deal may not mean much to you in the short run. Like instead of writing a check to Time Warner, you'll start writing a check to Comcast. That's because the two cable companies don't overlap geographically.

DAVID COHEN: We don't compete with Time Warner Cable, period.

ROSE: That's Comcast executive vice president David Cohen, on a conference call with reporters yesterday. Cohen says the deal will not be bad for competition.

COHEN: No consumer has a choice between our two companies. So putting them together is not limiting choice in any particular way.

ROSE: The merger would help Comcast reach into some of the nation's biggest markets now served by Time Warner - including New York, Los Angeles and Dallas. If it goes through, Cohen says, Comcast would still have less than 30 percent of the total cable TV market. But critics say that is the wrong way to think about the deal.

SUSAN CRAWFORD: These guys aren't really selling cable; they're selling infrastructure to Americans.

ROSE: Susan Crawford is a visiting professor at Harvard University. She says sure, Comcast has competition for video programming, from the likes of DIRECTV and others. But she says that's not Comcast's main interest here.

CRAWFORD: Comcast is in the business of competing with the Internet, at this point. They want to make sure that you don't get Internet access other than through them, and that their own partners get preference over their giant digital pipes. They have no particular interest in making sure that Americans get very, very fast, very high capacity Internet connections because they'd like their own video to do better.

ROSE: Crawford and other consumer advocates worry that this deal will give Comcast more leverage to hurt online competitors, like Netflix, and to favor its own programming from NBC Universal, which it bought two years ago. John Bergmayer is a staff attorney at the nonprofit consumer advocacy group Public Knowledge.

JOHN BERGMAYER: A company that has so much leverage and so much market power - if it wants to do mischief, it can do it.

ROSE: In other words, Bergmayer and others worry that Comcast will manipulate content flowing through its pipes to its advantage. Comcast faced many of these same questions before it bought NBC Universal, but company officials were able to persuade regulators to approve that deal - in part by promising to abide by open Internet rules. Those require Internet service providers to treat all of the traffic in their pipes equally, and David Cohen says Comcast has promised to abide by those rules - at least, for the next four years.

COHEN: We fully expect that there will be those who fear the sky is falling. But honestly, it's just not an accurate view.

ROSE: Still, the future of open Internet rules is very much in doubt since a U.S. appeals court struck them down last month. Regulators at the Federal Communications Commission, which crafted those rules, had no comment on the proposed merger of Comcast and Time Warner, though they would have to approve it.

Earlier this week, recently appointed FCC chair Tom Wheeler spoke at the University of Colorado, and stressed the importance of competition.

TOM WHEELER: And how our competition policy will take a seesaw approach where when it's working, the government doesn't have to do much. But the seesaw can go both ways.

ROSE: Industry analysts expect the FCC and antitrust regulators at the Department of Justice to take a hard look at how the proposed Comcast-Time Warner merger would affect competition. Dave Kaut is an analyst at Stifel.

DAVE KAUT: They're going to really want to look at that and make sure that somehow, Comcast and Time Warner Cable aren't leveraging their broadband pipes, and their control of them, to hurt online video competition. That will get a lot of scrutiny.

ROSE: But at the end of the day, Kaut thinks there's a good chance the deal will go through and by next year, customers in 19 of the top 20 markets may be writing checks to one company for their cable and broadband.

Joel Rose, NPR News, New York. Transcript provided by NPR, Copyright NPR.

Joel Rose is a correspondent on NPR's National Desk. He covers immigration and breaking news.