Consumers Union Speaks Out Against Comcast/Time Warner MergerBy: Sean Patterson - March 6, 2014
There are plenty of reasons to be opposed to the proposed merger of Time Warner and Comcast. The deal would see the two largest cable companies in the U.S. combined into one giant cable company covering much of the country.
From a consumer standpoint, cable companies are already non-competitive, with most of the U.S. split up into regional monopolies where consumers have one choice for truly high-speed internet. Though Comcast has tried to spin the transaction as a potential win for consumers, it isn’t clear how those customers. might benefit from a larger company operating their cable TV and internet service without real competition.
For content providers the deal might be a nightmare, with a larger Comcast able to almost name its own prices for retransmission fees, putting to rest the fights seen in the past.
Business and political leaders have already loudly announced their support or opposition to the merger. Today the Consumers Union officially announced its opposition to the deal.
The organization believes, of course, that the new mega-company would have no incentive to provide customers with either better service or lower prices.
“Under this proposed deal, two huge companies would become a behemoth,” said Delara Derakhshani, policy counsel for Consumers Union. “This has the potential to be a very bad deal for consumers. This industry is notoriously unpopular with consumers due to poor customer service, not to mention ever-increasing bills, and a deal this size doesn’t exactly convince us that things will get better. It’s hard to understand how this kind of concentrated market power, which would account for almost three-quarters of the cable industry, is going to benefit consumers. It raises several red flags about the power and influence that one company would have on the marketplace, and the impact it would have on your wallet and the choices you get. We’re counting on regulators to take a very hard look at what this enormous merger would do to competition, customer service, and bills that continue to climb year after year.”
Though the Consumers Union wields some power in consumer buying habits (especially for cars) the organization’s opposition to the Time Warner/Comcast merger is unlikely to affect the eventual outcome of the deal. This is partially because cable customers already don’t influence the competition-averse cable industry and partially because the companies involved simply don’t care.
Image via Comcast