Comcast Defends Planned Time Warner Acquisition

Comcast officials are before the Senate Judiciary Committee to explain how a planned acquisition of Time Warner Cable will affect consumer choice.
Posted at 7:39 PM, Apr 09, 2014

Comcast is defending its plan to acquire Time Warner Cable before the Senate Judiciary Committee Wednesday.

Officials from the two companies took questions from the Senate Judiciary Committee Wednesday afternoon. Sen. Patrick Leahy leads the committee, which wants to know how this merger would change the consumer ecosystem.

"Consumers do not want to hear complex legal jargon or obscure regulatory terms. Consumers want to know, is this merger good for them or not? Frankly every one of us want to find out the same things." (Via C-SPAN)

Comcast Executive VP David Cohen is defending the merger, saying it will make it easier for Comcast to build out network infrastructure and connect schools, libraries and low-income households to the Internet. Critically, Cohen says this deal will not reduce competition in the marketplace, reasoning that Comcast and Time Warner don't directly vie for consumers and therefore can't reduce their options. (Via U.S. Senate, Flickr / Jennifer Cogswell)

That said, if the merger goes through, Comcast-Time Warner would become a behemoth in the cable industry. The firm would control 28 percent of the U.S. cable market and between 34 and 40 percent of nationwide broadband access.

Digital Trends wonders, "With so much power across industries, why should Comcast innovate or upgrade when the majority of its subscribers have no viable alternative?"

Gene Kimmelman, CEO of Public Knowledge, testified at the hearing. He worried "Comcast would position itself to dictate how much consumers must pay, determine what packages of services customers must buy, and influence what devices people can use to receive the type of video content they want." (Via U.S. Senate, New America Foundation)

The worry comes despite promises from Comcast to extend its existing net neutrality obligations to its new Time Warner coverage areas.

When it acquired NBCUniversal in 2011, it promised the Federal Communications Committee it would treat all Internet traffic across its networks equally through 2018. (Via CNBC)

Meanwhile, public opinion of the deal is speaking for itself. Comcast secured the dubious honor of Consumerist's Worst Company in America award Tuesday as it filed its merger paperwork with the FCC.

Regardless of the outcome of Wednesday's meeting, Comcast's absorption of Time Warner is still subject to FCC and Justice Department approval.