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Coalition Forms to Stop Comcast/Time Warner Cable Union

3 Dec, 2014 By: Erik Gruenwedel

A group of companies, public interest groups, labor unions and industry associations Dec. 3 announced the formation of a coalition aimed at halting the proposed merger of Comcast and Time Warner Cable — the country’s No. 1 and 2 cable operators.

The group — “Stop Mega Comcast Coalition” — believes that no set of regulatory conditions can address the “substantial harms” that would be caused by the merger.

Comcast in February announced it had entered into a $45 billion acquisition agreement with Time Warner Cable. That deal was followed three months later by AT&T’s notice that it would acquire No. 1 satellite TV operator DirecTV for $48.5 billion. 

Federal regulators have put off deciding the fate of both mergers until next year.

Perhaps feeling the loser in a game of multichannel video program distribution musical chairs, Dish Network has aggressively sought to block the Comcast transaction. The No. 2 satellite TV operator, which is a member of the coalition, continues to express interest in merging with DirecTV — a scenario now put on hold.

Paramount to the group’s opposition is control of the nation’s broadband channels. A combined Comcast/TWC would reportedly control 50% of broadband distribution in the country.

“As the gatekeeper to half of all high-speed broadband connections in the U.S., 'Mega Comcast' would have the power to limit which, if any, competing over-the-top video services its customers can access,” Jeff Blum, SVP and deputy general counsel for Dish, said in a statement. “The inevitable result of this merger: fewer options at a higher price.”

Netflix, which is not part of the coalition, has publicly expressed its opposition to the merger — based in part on a recent peering agreement with Comcast to ensure smoother streaming access for its subscribers using Comcast.

Comcast in 2009 faced similar scrutiny when it acquired controlling interest in NBC Universal for $30 billion. Federal regulators signed off on the deal after extracting several concessions, including that Comcast remain a silent partner in Hulu, which it co-owns with The Walt Disney Co. and 21st Century Fox. 

Regardless, Gene Kimmelman, CEO of Public Knowledge, a civil liberties group, said the Comcast/TWC merger would be “disastrous” for consumers. Indeed, both cable operators rank poorly in customer service surveys.

“If allowed to go through with the merger, ‘Mega Comcast’ would deliver increased consumer frustration and hamper technological innovation. It also runs counter to our antitrust and communications laws. The [Federal Communications Commission] FCC and [Department of Justice] should unequivocally reject this merger,” Kimmelman said in a statement.

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