One Carrier to Rule Them All: Why Comcast Wants to Conquer Cable

Source: Getty Images

Source: Getty Images

The Comcast Corp.Time Warner Cable Inc. (NASDAQ:CMCSA), (NYSE:TWC) merger is one for the record books. Even those with no interest in tech news have heard about the mega-merger that has sparked controversy at every turn; after all, if the cable provider succeeds during Senate hearings and reviews by the FCC and Justice Department, it will have established dominance over 19 of the country’s 20 largest markets, possess about 30 million subscribers, and provide internet to an astounding 40 percent of the U.S. Guess what? That’s a lot of people.

Comcast, for one, is feeling pretty confident about it’s chances of convincing antitrust agencies the merger is harmless. “I have been struck by the absence of rational, knowledgeable voices in this space coming out in opposition or even raising serious questions about the transaction,” Comcast’s CEO David Cohen, told C-Span, per The New York Times.

Over and over again amid the debates, Comcast continues to echo the same mantra: because Comcast and Time Warner’s markets don’t overlap, the merger isn’t anti-competitive, and won’t limit consumer’s choices. Instead, the company touts the merger’s ability to strengthen the quality of the network. “This transaction will create a world-class blue-chip company, committed to innovation,” Cohen said during a conference call earlier this year, according to Politico.

A recent report from Politico, however, emphasizes the long-term effects of the Comcast-Time Warner merger, saying that while it’s true that cable TV won’t exist in the form it does today in, say, a decade or so, the company still threatens to cast a shadow over the wider media and telecom markets. Comcast has “positioned itself to be even more of a dominant force, both as a programming distributer, content owner, and broadband provider,” said Jeffrey Silva, a media and technology analyst at Medley Global Advisors, per Politico. “I think 10 years from now it’ll still be one of the largest, if not the most influential player, in the tech-media-telecom arena.”

The reasoning? Comcast knows that cable is facing a major shift, and it doesn’t want to become an artifact in years to come, in the way that local newspapers were made irrelevant by, and the music industry found itself crushed by iTunes, for example.

Even Comcast’s critics recognize the company is shrewd. “Comcast is almost unrivaled in the communication space. They are smart. They are connected. They do their homework. And they’re very good,” said Matthew Polka, CEO of the American Cable association, an organization that represents about 850 member companies. “They are thinking through the issues methodically in planning for their future, perhaps to the exclusion of others,” he said.

A visiting professor at Harvard Law School likened the cable giant to Standard Oil at the beginning of the 20th century, adding that, “Comcast is in an extraordinarily strong position to control infrastructure and piping vis-à-vis every other part of the media ecosystem,” she said, per Politico.

Perhaps one of the most important issues in the ongoing debate regarding the impending merger between Comcast and rival Time Warner is the fact that Comcast’s biggest service simply isn’t cable anymore. It’s broadband — and while the company will divest 3 million of it’s subscribers to keep it’s dominance over the market below the 30 million mark, it would still potential provide internet to 40 percent of U.S. consumers. Comcast and millenials both know that the future of television is the internet. That’s what’s really scary.

“It’s just so much power for one company to amass, and it’s not just cable,” said acting FCC chair Michael Copps, per The New York Times. “They’re a broadband company, they’re new media, they’re old media, they’re telecom, they’re everything.”

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