Comcast and Time-Warner Cable Play Real-Life Monopoly
It might seem like a game of Monopoly played by real monopolies and, with a tired groan, one might be tempted to dismiss it as part of an ugly but irreversible trend. But the merger of cable-television mammoth Comcast with its runner-up competitor Time-Warner Cable is a huge piece of news whose outcome, if it goes forward, will be crippling to communications in this country.
With this $45-billion deal, Comcast's 21.7 million subscribers will combine with Time-Warner's 11.4 million to put most tv subscribers in the pocket of one company, giving it control over about a third of all cable TV customers and unprecedented leverage over smaller regional and local providers. (Comcast has agreed to "divest" or sell off about 3 million subscribers, a ripple in the power pond.) Since cable television is now the primary source of news, education and entertainment for a large and increasing number of American families, this deal would make one company our primary newspaper, movie theater and library.
What's more, the deal would deepen the grave for the Internet as we know it: a grave already being dug with the recent Net Neutrality decision. Both Comcast and Time-Warner are major providers of high-speed Internet services. By combining Internet with the cable television services, the companies have been able to offer a slightly lower price and more convenient hook-up for Internet connectivity than the telephone and other companies offering it. That's won them a huge market -- about 40 percent of all high-speed connections in this country.
That market power has allowed Comcast to strike first in taking advantage of the recent Net Neutrality decisions. Netflix, the popular Internet-based movie and television provider, has now agreed to pay Comcast more money for smoother and quicker connections signalling a blow to Net Neutrality.
What that will do to prices is anyone's guess but the more important threat is to Net Neutrality because, with one company controlling so much of the market and legally allowed to choose what you can and can't access, there will be no open Internet. It will turn into a clone of cable television: charging you more for seeing some pages on the newspaper, viewing certain movies in the theater and accessing sections of the library.
The courts can stop this merger. Most analysts doubt they will.
Anti-trust laws have a critical place in modern capitalism. With an imperative to grow, companies always attempt to corner their market. And when they become big, companies can do virtually anything they want and have always been able to. The only real blocks they confront are labor unions (which are weaker than ever) and a set of laws explicitly outlawing monopoly: the ability of one company to control an entire market through take-over or purchase of its competitors.