Comcast / Time Warner Merger Won’t Reduce Competition, Actually Expands Net Neutrality

Today, Comcast announced an agreement to buy Time Warner Cable for $45 billion, which would make Comcast the largest provider of television and Internet connections in the country. But Comcast would divest enough TWC subscribers to stay below 30% of the cable market, a cap the FCC tried twice to impose, only to lose both times in court.

“There’s really no reason this deal shouldn’t go through. It doesn’t reduce competition between broadband providers. Any theoretical concerns about Comcast’s potential leverage over programmers are more than adequately addressed by the conditions of the Comcast/NBCU deal, antitrust law and existing FCC rules,” said Berin Szoka, president of TechFreedom.

When Comcast bought NBC Universal in 2011, it agreed to a long list of conditions required by the FCC, including special protections for online video distributors and Net Neutrality rules. These remain in effect even though the D.C. Circuit Court has struck down the same rules in the FCC’s Open Internet Order. The deal will extend these protections to eight million Time Warner Cable subscribers.

“Whatever leverage Comcast might gain, it can’t be used to thwart online video or promote Comcast’s own programming content,” explained Geoffrey Manne, TechFreedom Senior Fellow and Director of the International Center for Law & Economics. “If anything, the merger will effectively provide consumers with more bargaining power to rein in overall programming costs and lower their bills. Moreover, an expanded Comcast network should enable it to transmit content to all of its customers more efficiently. Meanwhile, the deal will enhance Comcast’s efforts to build the nation’s largest wireless mesh network, which could introduce new competition in the wireless market.”

“Those concerned about broadband competition should focus on the real problem: barriers to entry created by local governments and the pricing of rights of way and pole attachments,” added Szoka. “That’s what’s made it hard for companies like Google, Verizon and Centurylink to build fiber networks.” Last summer, Szoka explained in Wired that it’s local governments, not cable companies, that are to blame for hampering broadband competition.

Szoka and Manne are available for comment at media@techfreedom.org.

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