[opendtv] Weighing In on a Mega-Merger | Multichannel

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Tue, 2 Sep 2014 08:51:35 -0400


Weighing In on a Mega-Merger

WASHINGTON — Comcast can now size up its opposition.

A range of opponents have signalled their displeasure with the largest U.S. 
MSO’s proposed $45.2 billion transaction to purchase No. 2 Time Warner Cable 
since it was announced in February. Should the two companies consummate the 
deal — which Comcast said last week could happen by early next year — it would 
result in a mega-MSO with about 30 million subscribers and some 30% of the U.S. 
pay TV market.

Now, though, opponents of the deal are on the books at the Federal 
Communications Commission — chapter, verse and conditions — and 
Philadelphia-based Comcast can plan its counterpunches.

Dish Network, Free Press, the Consumer Federation of America, the Writers Guild 
of America West, the Future of Music Coalition, and WeatherNation TV were among 
those officially petitioning the FCC to block the deal.

If the agency doesn’t stop the transaction outright, the petitioners want 
plenty of conditions. Among the asks were protecting spot cable; making it 
easier to hook up third-party modems in Charter Communications systems 
(Stamford, Conn.-based Charter will own or manage an additional 5 million 
subscribers through transactions related to the Comcast-TWC deal); a la carte; 
retransmisson-consent conditions; and a veritable host of others. (See “Strings 

The deadline for comments from both sides was Aug. 25. Comcast noted that more 
than 200 groups and officials have weighed in with their support, but critics 
citing everything from Comcast’s size to its sports programming to its control 
of the weather, have argued against it.

Comcast received backing from a host of groups that claimed their partnership 
with the cable company benefitted minorities, broadband adoption, kids and much 
more, going beyond financial support to provide tech support and labor. Some 
critics labeled those efforts as buying support for the deal with corporate 

Many of the merger criticisms centered on the combined companies’ high-speed 
Internet subscriber count, with some putting it as high as 60% of the U.S. 
broadband market. Comcast said its share of Internet customers was at most 
35.5%, and as low as 15% if wireless LTE providers were included.

Comcast has until Sept. 23 to reply to the comments, but executive vice 
president David Cohen, who is responsible for shepherding the deal through the 
FCC and the Justice Department — as he did with the MSO’s 2011 acquisition of 
NBCUniversal — has already weighed in with a lengthy blog post responding to 
critics (see “Deal or No Deal,”), saying that some of the programmers critical 
of the deal are ones that failed to renegotiate better terms in exchange for 
their support.

Here are some highlights from last week’s FCC data drop.


• Netflix has complained the paid-peering deal it struck with Comcast was 
essentially extracted under duress (Comcast disputes this). The over-the-top 
video provider said the deal must be blocked, citing interconnection issues 
that, in Netflix’s view, should be part of the network-neutrality conversation. 
In a voluminous filing, Netflix said the deal is a fundamental threat to the 
online video distributor (OVD) industry, creating a company with the size and 
motive to foreclose online competition and slow or degrade traffic for 
customers who have paid for speed and access.

• Free Press, Public Knowledge, Common Cause, Consumers Union and about 60 
other groups said the deal would create a gatekeeper with too much control over 
the future of the Internet. They said the merger would “undermine” ownership 
and content diversity and that “no amount of promises or conditions would be 
good enough to assuage concerns about this merger.” (See “Deal or No Deal,”).

• Dish Network, the No. 2 U.S. satellite-TV provider, said the rosy picture 
Comcast and Time Warner Cable have painted of the merger is misleading. The 
real picture, Dish said, would show a company with the incentive and ability to 
sabotage OVD and traditional video rivals. No conditions would remedy the 
“serious competitive harms” of the merger, Dish has said.

• Programmer WeatherNation TV wants the deal blocked because it said the 
company would have the ability to foreclose competition in the meteorological 
programming space — Comcast has a 25% interest in The Weather Co., owner of The 
Weather Channel. It pointed out that The Weather Co. is already both 
WeatherNation’s chief competition and a key supplier of video graphics and data 

• Sinclair Broadcast Group said the FCC must either put conditions on the 
Comcast-Time Warner Cable merger — including retransmission-consent conditions 
(see chart) — deregulate broadcasters or deny the merger, a combination it said 
could drive TV stations out of business. Sinclair has said the deal would 
create a company with “unprecedented” horizontal and vertical scale, which it 
could use to raise prices, reduce competition, and diminish localism, diversity 
and consumer choice.

• No amount of conditions are enough for the Writers Guild of America West, the 
union representing TV and online writers, including news writers. “We have 
reached a critical juncture in the history of the media, broadband and 
telecommunications industries,” WGAW president Chris Keyser said of the filing 
last week. “The FCC must put a stop to this spate of merger madness that 
threatens every principle of free market economics we deem important.”


• Urban League of Springfield, Mass., president Henry Thomas praised Comcast’s 
Internet Essentials low-cost broadband program and urged the FCC to approve the 
deal. “It is hard to find a more effective program to bring Internet to those 
young people who depend on access for school work more and more every day,” he 
said, welcoming expansion to former TWC systems once the deal is approved.

• The Democratic Municipal Officials Association weighed in to support the 
deal, even though Comcast executive vice president David Cohen has said he does 
not think municipal broadband is the best way to bridge the digital divide. 
“This transaction stands to produce new investment in infrastructure that will 
enhance video and Internet service in our communities,” DMO president Cindy 
Lerner said.

• TiVo cited Comcast’s history of working with it on retail set-top innovation 
as a reason it supports the deal. “TiVo believes that approval of the 
above-referenced transaction should benefit consumers that wish to use retail 
devices to access their pay TV programming,” the digital video recorder 
manufacturer said.

• The Competitive Enterprise Institute, a libertarian public-policy 
organization, said the FCC should approve the deal without conditions. The 
group said it doesn’t know whether the deal will provide all the benefits 
economic theory suggests, but it said it is confident that “the upside of the 
deal for consumers is far more promising than its downside is worrisome.”

• Crown Media Holdings, parent of Hallmark Channel and Hallmark Movie Channel, 
is one programmer that is fine with the deal. In a letter to FCC chairman Tom 
Wheeler that was entered into the docket, Crown Media president Bill Abbott 
said Comcast has been “one of the most supportive distributors of unaffiliated 
and independent programmers,” and that he believes Comcast- TWC will be a net 
positive for Hallmark and other independent programmers.


• The National Association of Broadcasters — in a pitched battle with cable 
operators over retransmission consent, but counting Comcast’s NBCUniversal 
among its members — steered a middle course. It did not comment on the 
substance of the deal, but signaled that Comcast was currently in discussions 
with some broadcast groups over their concerns.

• The New York Public Service Commission is conducting its own review, and said 
it was not ready to take a side. But it also said it thought Comcast and Time 
Warner Cable were low-balling the potential for both horizontal and vertical 

• Discovery Communications in July hired a pair of Capitol Hill veterans to 
lobby on the deal. “Consolidation raises some real issues here in the U.S. and 
everywhere in the world,” CEO David Zaslav said at a Sanford Bernstein investor 
conference in May. A Discovery source said company execs were to meet with FCC 
officials last week to talk about the transaction, but that it was not filing 
comments supporting or opposing it at this time. The source said Discovery 
could join in reply comments, which are due Sept. 23.

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