Part Two of the Assault: The Comcast/Time Warner Deal

Last week I wrote about the January 14th ruling by the DC Circuit Appellate Court that struck down the existing net neutrality rules, arguing that such a move was a devastating blow to the free and open internet as we know it.  Without strong net neutrality rules, large telecommunications companies have the power, at will, to decide which websites work properly and which – “oh ain’t that too bad” – have disrupted, slower service.

Now the news has come out that Comcast is seeking to acquire Time Warner Cable for $45.2 billion.  This would increase Comcast’s market share of cable providers to roughly 30 million customers – about 30% of the U.S. market.

 This amounts to yet another disturbing development in the trend of big telecommunications companies consolidating their control of the U.S. cable/broadband market.  And this has major ramifications for internet freedom.  Comcast’s chief executive, Brian Roberts has said that, “I believe television will change more in the next five years than in the last 50.”  According Edward Wyatt of the New York Times, this is because consumers are increasingly turning to web streaming services such as Netflix for their TV (House of Cards season two, anyone?).  Wyatt writes:

 “…much of the focus on Thursday over how the proposed deal would affect competition in cable TV overshadowed what could be a more important consideration for regulators: the merger’s effect on broadband Internet service, which is rapidly becoming the most important pipe running into the homes of most American consumers.”

This deal would give Comcast twice the number of broadband internet subscribers as compared to the second largest internet provider, 32 million customers versus AT&T’s 16 million; 38% of the internet subscribers in the U.S. would be Comcast customers.

This is a problem because broadband providers have a pretty bad track record of keeping the consumer in mind.  Susan Crawford of Benjamin N. Cardozo School of Law points out that, with the interest of their shareholders paramount, companies like Comcast are generally loath to make investments in infrastructure that would increase internet access and speed.  Why make a better product when you’ve already cornered the market?  And, on the occasion that municipalities throw up their hands and attempt to build their own public broadband infrastructure, telecoms go to work in state legislatures to curtail that possibility, too. (Crawford recently published a book on this topic, as well)

Thankfully, there has been a quick and forceful reaction against this development, with a number of journalists, consumer groups, and lawmakers calling for intense scrutiny, if not decrying the deal outright. Additionally, well financed competition might eventually force big telcom’s hand, as in the case with Google Fiber, which could potentially provide better quality service at a lower net rate.

What is clear is that big telecoms have their sights set on vastly increasing their control over the internet. Given the vital role the internet plays in so many facets of our lives, combined with the track record of big telecommunications companies in restricting access, the Comcast/Time Warner merger is, indeed, cause for concern.

6 Comments

  1. Esther Kim says:

    Great great great. I love the data — awesome post, Russell!

  1. […] there was the announcement of the Comcast – Time Warner Cable merger, which would consolidate almost 40% of Internet users in the U.S. into the hands of a single […]

  2. […] there was the announcement of the Comcast – Time Warner Cable merger, which would consolidate almost 40% of Internet users in the U.S. into the hands of a single […]

  3. […] court struck down the FCC’s old rules protecting net neutrality, then there was the proposed merger of Time Warner Cable and Comcast – setting up an ominous monopolistic force, and most […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: