February 14, 2014

Comcast today didn’t waste much time in paving the way for what they hope will be regulatory approval of their $45 billion planned acquisition of Time Warner Cable. Needless to say, there’s going to be a lot of worries about the impact of letting Comcast grow ever larger, even if the company plans to divest a small chunk of their acquired markets to Charter Communications. Geographically, the deal makes sense for Comcast as it gives them a broader entry into the Los Angeles and New York City markets, where Time Warner Cable has traditionally under-performed.

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While some will argue there’s nothing to worry about because Comcast and Time Warner Cable didn’t compete, the real concern for many will be sheer marketplace power, with an even larger Comcast having greater leverage than ever to use regulatory capture and ever-spreading usage caps to unfair market advantage.

Worry not, declares Comcast in documents released today to smooth regulators’ furrowed brows. A memo (pdf)by the company argues that you shouldn’t worry about Comcast’s growing size because they’ll be kept in check by….Google Fiber:

quote:“In today’s market, with national telephone and satellite competitors growing substantially, with Google having launched its 1 GB Google Fiber offering in a number of markets across the country, and consumers having more choice of pay TV providers than ever before, Comcast believes that there can be no justification for denying the company the additional scale that will help it compete more effectively.”

Except as regular readers are well aware, Google Fiber is a great and disruptive product, but it’s never going to seriously compete with Comcast in any real scale. As for those “substantially” growing telephone companies like AT&T and Verizon, Comcast omits to note that they’re backing away from unwanted markets on a massive scale, leaving Comcast with a stronger monopoly presence than they’ve ever had.

Comcast then tries to argue in a “public interest benefit summary” (pdf) that companies like Hulu and Amazon will also keep the company in check:

Quote:”A number of online businesses like Apple, Google, Amazon, Hulu, Netflix, and a host of smaller companies are entering the online video space and trying to position themselves as competitors. While we view online businesses as complementary to our business, previous antitrust concerns about further cable consolidation are truly antiquated in light of today’s marketplace realities.”

Please ignore of course that along with broadcasters Comcast co-owns Hulu too, and while NBC merger conditions tied their hands to some degree, Hulu’s broadcast-owners are endlessly and collectively working to ensure Hulu is nothing but a glorified ad for traditional TV. Also ignore the possibility that Comcast could use their massive leverage on restrictive licensing deals and usage caps to thwart and hinder streaming companies across the board.

All in all you should simply know that you don’t have to worry about Comcast’s massive size, because magic dragons, Hulu, and Google Fiber (with all of its thousand or so actual subscribers) will keep Comcast on their best behavior. via DSL Report

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