Other Voices

Another merger plan would create ‘mega cable’ company

Trader Peter Tuchman, left, and specialist Jay Woods at the New York Stock Exchange.
Trader Peter Tuchman, left, and specialist Jay Woods at the New York Stock Exchange. AP

Last year, the nation’s biggest cable company, Comcast, tried to buy the second-largest, Time Warner Cable.

Consumers, public interest groups and businesses rallied against the proposed deal, pointing out that the mega-merger would stifle competition, particularly for new streaming video services provided over the Internet.

Fortunately, regulators heeded those concerns and Comcast gave up the idea.

But rather than take the lesson that America simply does not want or need cable giants dominating the future of the Internet, a new set of cable giants is trying to merge and, if successful, could threaten consumers in Dallas-Fort Worth and nationwide.

This time, the deal would combine Charter Communications, Time Warner Cable and Bright House Networks to create a cable-and-broadband colossus serving more than one in three cable pay-TV homes, almost one-third of high-speed-broadband homes and dominating the country’s largest and most important geographic markets, including Dallas-Fort Worth.

This new “mega cable” company would be the only option for high-speed broadband choice for two-thirds of its subscribers.

Charter, together with Comcast, would be a dangerous duopoly controlling a majority of high-speed broadband connections in the country.

This would give the companies the incentive and ability to work together to reduce competition from new online streaming services, limit access to independent programming and raise prices.

The fate of streaming services like Amazon, Hulu and Sling TV would lie in the hands of the very cable giants most threatened by the emergence of this new competitive choice.

Charter and Comcast could easily use their market power to make it harder for those streaming services to compete.

For example, the cable giants could force programmers to deny streaming services access to their most valuable programming.

Both Charter and Comcast would control the set-top box their customers use to access video on their TVs, and they could use that control to limit viewers’ ability to access online video services.

Charter would also enjoy increased bargaining power over programming fees, allowing it to severely undercut smaller cable companies or new entrant video services, threatening their viability and limiting the delivery of broadband service to rural America.

Ultimately, this would serve to inhibit growth and innovation among small or emerging entities, limit access to new or alternative cable services and dramatically reduce the volume and diversity of content available to consumers.

Finally, ongoing price hikes and poor customer service for cable subscribers in Dallas-Fort Worth could result if this deal goes through.

If the deal is completed, Charter will take on $27 billion in new debt, or $1,142 in debt for each customer.

The company will have every incentive to cut costs by further degrading customer service, limiting investments in its services and raising prices.

The good news is that opposition to the merger is growing, and it is still under review at the Department of Justice and the Federal Communications Commission.

On Feb. 17, Senate Antitrust Committee Chairman Mike Lee, R-Utah, and senior Democrat Amy Klobuchar, D-Minn., sent a letter to federal regulators urging them to ensure the merger “[does] not impede new, developing options for consumers to receive video content or undermine independent programmers’ ability to access consumers.”

Just one day later, a coalition of public interest groups delivered more than 300,000 public comments to the FCC, asking it to reject the proposed transaction.

In the coming weeks it will be crucial for consumers in Dallas-Fort Worth and elsewhere to echo these concerns to ensure that regulators prevent the harms posed by this merger.

John Bergmayer is a senior staff attorney with Public Knowledge, which is a member of the Stop Mega Cable Coalition.