Merge of the Titans

[Zack]

Comcast confirms $45 billion merger with Time Warner Cable

Comcast has just made official the agreement rumored last night: it is acquiring Time Warner Cable in a multibillion-dollar deal. Officially presented as a merger between the two US cable giants, the agreement will see Comcast absorbing 100 percent of TWC in a $45.2 billion all-stock transaction. As a result, current Time Warner Cable shareholders will find themselves owning roughly 23 percent of Comcast's common stock.

Monopoly concerns immediately rise to the fore with a merger of this scale, which Comcast will try to allay by making divestitures. It's acquiring TWC's 11 million managed subscribers, but says it's prepared to divest systems that serve roughly 3 million, netting it 8 million from the deal and an overall total of 30 million managed subscribers. The company says that will keep it below a 30 percent share of the US market.

Do you think the FCC and DOJ will allow this? The biggest cable company acquiring the second-biggest; it's like AT&T's attempt to acquire T-Mobile, but even worse!

 

[Kyriakos]

It won't go through if one releases the Kraken.

 

[Cutlass]

They'll probably allow it. No one gives a flying frak about the consumer anymore.

 

[mangxema]

Do they actually compete with each other now?

 

[Cutlass]

Probably not. Each has it's own areas. Cable is close to a monopoly everywhere. With some, inferior, competition from the phone and satellite companies.

 

[Quintillus]

They'll probably allow it. No one gives a flying frak about the consumer anymore.

I would've agreed until the AT&T/T-Mobile merger was blocked. That gives hope that this merger might be blocked as well.

I'm skeptical that it will be approved, since cable is already such a monopolistic industry, and this would only lead towards more of that. Even if there isn't that much overlap between their customers, 30% of a market that is a monopoly or duopoly in most areas is an awful lot. In some cases, cable is more of a monopoly than mobile service - at least in the latter, there are usually 4 or 5 choices, not counting MRVNOs.

 

[Cutlass]

The real problem is cable companies that are also content owners. This creates a conflict of interest that can't be avoided. What needs to happen is that regulators should declare cable companies to be common carriers. And so have no ownership of content, and be forced to treat all content equally.

 

[Antilogic]

I don't know if it will be blocked or not (haven't picked up the story until now), but my gut tells me I shouldn't like this merger.

The real problem is cable companies that are also content owners. This creates a conflict of interest that can't be avoided. What needs to happen is that regulators should declare cable companies to be common carriers. And so have no ownership of content, and be forced to treat all content equally.

I'm not holding my breath. Net neutrality is suffering a slow death.

 

[Quintillus]

The real problem is cable companies that are also content owners. This creates a conflict of interest that can't be avoided. What needs to happen is that regulators should declare cable companies to be common carriers. And so have no ownership of content, and be forced to treat all content equally.

That's a major problem, too. Really, there are two problems - horizontal consolidation leading to reduced competition between companies even from its already often-sorry state, and this vertical integration causing companies to favor their own services. Both are monopolistic. Which is worse, I'm not sure. But even if cable companies couldn't own content, I'd probably still be against this merger. Similar to the AT&T/T-Mobile case, it seems hard to believe that this could actually lead to more competitive prices and products for consumers.

 

[Cutlass]

Mergers between large companies are almost never about any benefit to the consumer. If they were, then there would be a lot less incentive for the companies to do them. But they have to make that claim, because regulators make them at least go through the motions. And they have to have some concern with public opinion. If they were honest, and said that it was all about the company's bottom line, and that the consumer would probably be worse off, then no one would permit it to happen.

 

[peter grimes]

The real problem is cable companies that are also content owners. This creates a conflict of interest that can't be avoided. What needs to happen is that regulators should declare cable companies to be common carriers. And so have no ownership of content, and be forced to treat all content equally.

I think you and I were reading the same thread on reddit.

I'm against the merger. But I really don't know nearly enough to make a prediction about the deal.

 

[DinoDoc]

Do you think the FCC and DOJ will allow this? The biggest cable company acquiring the second-biggest; it's like AT&T's attempt to acquire T-Mobile, but even worse!

The two companies don't really compete against each other.

 

[Rashiminos]

Lucifer is tuning his orchestra as we type.