This week, Comcast announced that it had come to an agreement to buy up Time Warner Cable, combining the nation’s biggest cable and broadband operator with the nation’s second biggest cable and broadband network. The result, after Comcast sheds 3 million or so subscribers (and who knows where those poor sods will end up) is a cable and broadband company with 30 million subscribers. When you own the access to cable and the Internet for 30 million in the United States, you wield a shitton of power. With power comes responsibility, and if you’re a subscriber to either Comcast or Time Warner now, you already know how poorly those cable companies live up to those responsibilities. You like those four hour windows waiting for the cable guy? Well, look forward to eight hour windows. Or weeklong windows. Or “whenever we get around to it” windows, because for 30 million homes in the United States, Comcast is about to own our ass.
Here’s five reasons how the merger could affect individuals negatively.
1. Television networks wouldn’t be able to exert as much leverage over Comcast, because blackouts would mean the loss of 30 million viewers. Therefore, there’s the possibility that smaller networks will sink. Moreover, the surviving networks may turn to DirectTV and Dish to extract higher licensing fees, ultimately forcing those two into a merger so that they can wield more leverage, which reduces competition even more and, ultimately, increases the price of cable for consumers.
2. So, you think, you’ll use this opportunity to finally do what you’ve been talking about doing forever: Cut the cord and rely on Netflix, Hulu, iTunes, etc. Well, here’s the rub: The Comcast and Time Warner merger isn’t really even about the cable; it’s about the broadband. They’ll own 30 million subscribers’ access to the Internet, and guess what? With less competition, they’ll run right over the consumers, starting with caps, which Comcast already uses. That will either force you into a higher broadband package, or you’ll end up paying overage fees. Either way, you’re going to be paying the man more for your television consumption, be it cable or Netflix.
3. Moreover, not only will Comcast likely force higher consumer fees onto the consumers for broadband access (and remember, this racket is 90 percent profit for Comcast), they could also force Netflix to pay them higher rates to stream their content, resulting in higher subscription rates for Netflix consumers (or, an ungodly thought, no Netflix at all, since Netflix may end up in a similar situation as the networks with regard to licensing fees). A court recently struck down net neutrality laws, so Comcast will likely be able to play favorites by, say, amping up the streaming access to Hulu and throttling the stream to Netflix, or vice versa.
4. For businesses, in 19 of the 20 largest metro areas in the US, Comcast will be their only choice for high-capacity broadband, resulting is less competition and higher prices, which business will pass on to consumers.
5. Oh, well: You’ll just get Apple TV then, right? Well, the merger could interfere with Apple TV’s plan to roll out its new TV set later this year, because Apple is relying on its ability to add a lot of content, which may get tricky with the merger. Why? Comcast already owns NBC, and with the leverage of 30 million viewers, it’s not unthinkable for Comcast to favor those content providers that play nice with Comcast and not so nice with Apple. (Mashable)
6. Anyway you look at it, this means less competition, and less competition in a market that is already lacking in competition will not be good for consumers. Mergers like this encourage other mergers to that other companies can remain competitive, so it’s not a stretch to imagine that the smaller broadband companies will join forces, decreasing competition even more. With no competition, there’s higher prices and worst service because there’s no incentive to, for instance, improve the already lousy customer service. What are you going to do? Jump ship? Not if you don’t have any other practical alternatives.