Monthly Archives: February 2014

Time Warner Cable and Comcast merging is bad, period – consumers should fight it viciously.

Imagine one day you woke up to the news that one company controlled essentially 70% of the access to electricity production in the United States. Or gasoline refinement. Or wireless phone service.

Comcast buying Time Warner is like that, but the internet. And TV. And make no mistake – the internet is as much an economic necessity as the gas in your car, or the electricity in your home. This country established over a century ago that anti-competitive monopolies, whether in-effect or actual, are generally not in the interest of consumers – especially when those monopolies are on markets we all essentially have to participate in as consumers.

“The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself.”

Those words, in reference to the Sherman Antitrust Act of 1890, were written by the US Supreme Court in 1993. The spirit of that act holds as true today as it did 134 years ago. Cable companies never got the memo.

In the US, we have broken monopolies of the phone lines, the oil business, and even the photography industry. If the Comcast-Time Warner merger is not stopped, we will face a monopoly of television and landline internet.

Combined, TWComcast would be accessible to over 70% of the US TV and broadband subscriber base – not one, but two massive industries. General consensus at this point seems to be that the DoJ and FCC will likely approve the deal, because the merger will not have an immediately anti-competitive effect. The logic goes that, because Time Warner and Comcast have carefully gerrymandered their respective regions of control in the US, the tiny amount of service overlap between the two means they don’t actually compete. So, the thinking from there is: how can two companies who don’t even compete conduct a merger that is “anti-competitive”?

I would pose the following question in response: how are two companies who actively discourage competition (by definition, an anti-competitive practice) going to merge in a way that does not continue to discourage competition? It is fucking absurd to me that anyone could possibly assert with a straight face that TWComcast would show restraint in its tyrannical control of nearly every major broadband and TV market in the United States. Once Comcast has Time Warner, its only focus will be on that remaining 30%, and dominating it. In the short term, this will probably be a plus for consumers, because it will actually create some competition – TWComcast would go on a prolonged promotional blitzkrieg in markets where Verizon, AT&T, Cox, Charter, or a number of other, smaller providers dominate. Those smaller providers would respond in kind – everybody wins! Lower prices, faster internet, more free DVRs! Until the day comes where, inevitably, TWComcast wins because they’re the only company with the capital and marketing reach to sustain a short-term loss in order to secure a long-term gain. And that’s when the squeeze starts.

But isn’t that competition? Isn’t that the kind of battle we actually kind of want? With a shortsighted view of the market, yes, it is. The cable industry is remarkably noncompetitive right now, and a TWComcast merger would jumpstart that competition – briefly. Much in the way combining Mentos and Coke will produce an exciting reaction only to unceremoniously turn into a flat puddle of brown mess, TWComcast would fizzle out smaller providers in regional markets.

Or, worse yet, TWComcast could just sit on that 70% and figure out the best way to more effectively wring dollars out of it while cutting customer service and slowing infrastructure investment. Either way, the end result is a loss for consumers.

I realize the cable / broadband market right now is far from highly competitive, but allowing the two largest players in what is already a laughably complacent industry to merge into a fifty billion dollar clusterfuck is like smearing Crisco on a Big Mac. It’s not any better, it’s just worse for you.