Tuesday, April 21, 2015

Cable Mergers Derailed?

Will Comcast be allowed to acquire Time Warner Cable?  Will AT&T pick up DirecTv?  And does Charter get to buy Bright House Networks?  While the process seems to have been going on for an interminably lengthy amount of time, recent news has emerged that the DOJ might not be in favor of consolidation.  Comcast is scheduled to meet tomorrow with the Department of Justice to demonstrate why the merger should proceed.And should it not, it seems the above deals would fall apart as well.

The biggest concern seems not about carrying cable channels but having a powerful grip on the wired broadband marketplace in the US.  While competition has already been limited for broadband access, and Comcast and Time Warner Cable never competing with each other in any market, their combined entity would hold a powerful monopoly across the country.  And while DSL is a competitive option, the potential of cellular and wireless competitors could one day become a stronger force.

A bigger stumbling block may be the Comcast ownership of content including NBCUniversal and its broadcast and cable networks.  Already we have heard that issues with NBC carriage on OTT services like Sling TV and Apple TV.  In LA, Time Warner Cable airs Dodger games on its own cable line-up but has been unable to come to fair terms with the other cable providers in the market to air its sports network.  Would the DOJ or FCC require Comcast to relinquish majority control of their content networks as a compromise to their acquisition efforts?

With meetings this week, we will wait and see what happens next.  I suspect that ultimately approvals will occur. 

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