Monday, December 8, 2014

Will FCC Approve Cable Mergers?

The FCC is back on the clock but no decisions will happen in 2014 regarding the two mergers on the docket, Comcast acquiring Time Warner Cable, and AT&T acquiring DirecTv.  Per Business Week, it is unlikely that any such approval or disapproval will happen till March at the earliest. 

Consolidation offers great cost efficiencies but it can also hurt competition and lower prices.  Given the high barriers of entry in the industry and limited competition due to franchise approvals in every community, consumers have already experienced limited choice for cable or satellite.  These two mergers do little to worsen the already limited playing field.

The FCC may be less concerned with cable and more concerned with broadband access.  Still, there is limited competition with buyer and seller in this market as well.  DirecTv doesn't even offer a broadband business and Comcast and Time Warner do not compete against each other.  Comcast would control a vast majority of the US market seeking to access cable and broadband.  But I don't believe it will stop these mergers from occurring.  Opening spectrum, encouraging new entrants to enter the space, and supporting investment in new wireless and broadband technologies to improve connectivity and speed are what consumers really want. 

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