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We’ve all had our fair share of nightmare stories when it comes to dealing with our cable and broadband providers, whether it’s being on hold for hours, dealing with “Jeff” from Indiana when you know he’s in an Indian call center, or bending over and getting proverbially fucked by your provider on its rates. Now, news is spreading today that Comcast and Time Warner agreed to a $45.2 billion merger. Both CEOs of Time Warner and Comcast view this merger as a “win-win” for the companies and their customers.
According to Gus Lubin’s article on Yahoo! Finance, “Time Warner’s television service received the worst score for a national company on the American Consumer Satisfaction Index, which evaluates companies each year based on some 70,000 customer surveys. The company’s telephone and Internet service also received abysmal scores. Comcast’s Internet service tied for the second-worst score among national companies, with similarly bad scores for television and phone service.” This is no secret for anyone who has been forced to call their cable provider for any issue, no matter how small. Just imagine the horseshit we’re going to have to deal with in the new call center, considering both are extremely large organizations and deal with issues in different ways.
Your first thought may be, “Wouldn’t this merger create a monopoly?” Comcast currently provides their services to 22 million people; Time Warner has 11 million people, respectively. The combined entities would result in a 30 percent market share of the cable/Internet/phone industry. There will be a fierce battle before the deal is finalized, and since I’m a 23-year-old with no knowledge of how the legal system works, I can leave that up to our lawyer commenters if they know how it all works.
Why are these two giant corporations agreeing to merge? Easy answer, for MONEY. These companies are realizing threats from two known sources: cord-cutters, and the networks themselves.
Cord-cutters
I haven’t had cable in two years, and I don’t miss it for a second. Netflix, Hulu Plus, and countless channels on Roku players provide enough content for me when I recover from a hangover on Saturday morning. These giants know the trend is heading towards more people cutting the cable cord. However, without the availability of alternative high-speed Internet options, they still know we need them.
Networks
Networks themselves put pressure on cable companies to provide a better deal. The most recent victim? The Weather Channel. I hear advertisements on the radio daily asking people to call their local cable company to save the Weather Channel. Without them, how would I know what the weather is outside? Other victims in the past: Comedy Central, CBS, MTV, etc.
So with this added pressure of trying to remain profitable and relevant, these giant corporations want to merge together to take control of the market. If they get their wish, I fear that they can set the market price for cable, Internet, and phone services, as well as implement data caps much like phone companies do on cell phone plans. This could also cause limited content available to stream on platforms such as Netflix, Hulu, and Roku. And at the end of the day, if any of those assumptions become true, as consumers, we would be the raw end of the deal.
Here’s hoping that Google Fiber and other high-speed Internet options become more widely available. That way, you can spend more time streaming what you want, and less time on hold with “Jeff” from Indiana.
[via CBS Money Watch]
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BoozeandSchmooze
Booze and Schmooze is a 2012 graduate from a state-run party school in Minnesota, with honors in keg stands, and passive-aggressive MN nice behavior. You can see him rollerblading in the Mall of America with a duck call in honor of the District 5 hockey team, who became the Mighty Ducks. "Let him make the first move, Conway" - Gordon Bombay
From what I’ve read the antitrust short answer is:
1) the two companies don’t really compete in local markets in internet service, so they’re cool on that front
2) someone is gonna have to lose some cable subscribers.
This is not legal advice and I am not an antitrust lawyer.
Comcast is going to divest about 3 million customers, but they’re still going to net 8
Appreciate it. I know it’s going to be quite complicated for the merger to be completed. I’m not going to pretend I know a damn thing on the legal issues with it.
The interesting thing will be whether the FCC does anything bc they have broad regulatory power to act for the public good.
They denied the T-Mobile/Att merger, so I have some hope left out.
My assumption is that they want to make a big push to expand their high-speed internet coverage (of course by asking for federal funds). Either way they win, the government is unlikely to subsidize a second company to deliver services to those customers and other companies are unlikely to provide competing coverage because consumers are unlikely to switch from an existing service.
We have to pay an ungodly sum of money for satellite internet and would most certainly switch to cable internet if they ran a line to us, even though I loathe both companies.
There’s no doubt this is now a battle for bandwidth. The fight for cable is lost, and people will choose either way to cut the cord or continue to pay $120 a month for cable. For people like me who have cut the cord, bandwidth is still the most important thing, and it sucks having to rely on these companies to provide it. If they corner the market with the merger, I’m afraid we’ll never see cheap prices on internet.