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WGA Voices Opposition to Comcast/Time Warner Cable Merger

23 Mar, 2014 By: Erik Gruenwedel

Writers Guild, in a brief to the FCC, said Comcast would control 30% of cable, satellite and broadband markets

The Writers Guild of America said the proposed acquisition of Time Warner Cable by Comcast would unfairly advantage the cabler’s stake in the multichannel video program and broadband distribution markets.

In a March 21 brief filed with the Federal Communications Commission, the WGA — which represents writers of TV shows and movies — said Comcast’s $45.2 billion acquisition of TWC would give the cabler too much control over retransmission agreements and rates, in addition to data caps for online consumption.

Calling the merger a “monopsony,” in which one buyer (Comcast) can dictate the rules to many sellers,” the WGA said the deal would be “giving [Comcast] the means to limit competition from online video providers like Netflix and Amazon. Comcast has already demonstrated its inclination for anti-competitive behavior by exempting its own streaming service [Streampix] from data caps when watched on an Xbox, while applying data caps to competing services.”

Indeed, Comcast’s recent deal with Netflix, whereby the streaming pioneer agreed to pay the cabler for smoother broadband access for its subscribers, prompted Netflix CEO Reed Hastings to call for tougher net neutrality guidelines.

The WGA said that the 1995 repeal of the Financial Interest and Syndication Rules (enacted in 1970), which prohibited the major broadcast networks from owning any programming aired in primetime or syndication, has resulted in a market in which seven companies — CBS, Disney, Discovery, NBC Universal (owned by Comcast), 21st Century Fox, Time Warner and Viacom — own the majority of broadcast networks and control 95% of all TV viewing (excluding Sony).

In repealing Fin-Syn, broadcasters had argued that proliferation of cable and satellite operators leveled the content distribution playing field. At that time, Comcast was a regional operator with 4.3 million subscribers after acquiring E.W. Scripps cable systems.

“Allowing [Comcast] to add eight million subscribers [to 31 million] only increases its ability to limit competition,” the WGA wrote. “Because of the large capital expenditures necessary to enter the MVPD market, video distribution will never have robust competition unless the FCC takes action to limit anti-competitive behavior. There are simply no conditions that can undo the harm a merged Comcast-TWC would cause.”

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