On Thursday, Comcast and Time Warner Cable – the two largest cable companies in the US – confirmed their merger, with Comcast buying Time Warner for about $45bn in stock. American viewers have concerns about how such a move toward a monopoly will affect content selection and delivery, as well as rates. Antitrust regulators will be scrutinizing the proposal.
Comcast CEO and chairman Brian Roberts said in a statement: “The combination of Time Warner Cable and Comcast creates an exciting opportunity for our company, for our customers, and for our shareholders. In addition to creating a world-class company, this is a compelling financial and strategic transaction for our shareholders.”
Comcast began promoting the deal to its customers on Thursday by touting the improved technology and resources the merger will provide. Comcast is expected to add eight million new subscribers in the process, bringing their total to 30 million. The company owns about 20% of the pay TV market in the US.
Comcast will now be a deciding force in shaping content in the US. Craig Moffett, industry analyst for Moffett Nathanson Research, wrote: “A company of that size would arguably have de facto control of what content could and couldn’t exist in the US. A programmer that failed to get a distribution deal with Comcast arguably wouldn’t be economically viable.”
Critics are protesting the mammoth deal. John Bergmayer, of the advocacy group Public Knowledge, said: “It is simply dangerous for a large proportion of our nation’s critical communications infrastructure to be in the hands of just one provider. If Comcast takes over Time Warner Cable, it would yield unprecedented gatekeeper power in several important markets. An enlarged Comcast would be the bully in the schoolyard.”
Comcast also recently acquired TV and movie studio NBC Universal. Of the 50 largest urban markets in the US, Comcast will be present in 43. Since the two cable giants did not overlap in any of the same areas, however, consumers will not have fewer options in pay TV providers.
The deal reflects Comcast’s vision of developing into a broadband and media force to be reckoned with from its cable TV origins. As more people go to the Internet for entertainment and communications, cable subscriptions are in decline.