Comcast Acquiring Time Warner Cable In All Stock Deal Worth $45.2 Billion

http://online.wsj.com/news/articles/SB10001424052702303704304579379801986541412

by ssclafani • 12 years ago

435 314 12 years ago

online.wsj.com

mgkimsal3• 12 years ago

Aren't there antitrust laws to protect against this exact sort of thing?

tfigment• 12 years ago

Indeed. This is not a good thing for consumers. Comcast is way too big as it is and does not need to dominate the market any more than it already does.

My former company was the market leader and acquired the #2 player and gov't eventually stepped and force sold off a significant part of the acquired company including allowing the new buyer to give hire offers to anyone in that company which probably 75% of them took (or left). My guess is Comcast has better lobbyists and nothing will happen and execs will be congratulated by the regulators.

gorner6• 12 years ago

It doesn't violate anti-trust laws to buy another company you do not compete with. And there are very few, if any, territories where Comcast and TWC directly compete at present – depending on where you live, you can subscribe to one or the other (or some other cable company), but not both.

mgkimsal3• 12 years ago

but... they only don't compete because of govt sanctioned monopoly status in the first place, no?

famousactress• 12 years ago

As a TWC customer I've been long certain based on conversations with others that I have the second worst cable company in the country. So my reaction to this announcement is approximately "FUUUUUUUUUUUUUUUUUUUUUUUUUUCK."

ryanSrich• 12 years ago

I can confirm that you do.

Nothing in your life has prepared you for Comcast.

jebblue• 12 years ago

We had Comcast in Cali, in Texas TW was a breath of fresh air, about 3 years ago all these weird fees kept showing up. A year ago we were fed up and dropped all but Internet, went digital TV OTA (over the air) plus Roku and Netflix (my brother clued me in that Netflix actually had streaming now). Roku has some interesting channels we never got on any cable.

Now we could be back with ... Comcast? Yuk. Hey as long as they don't mess with our current unlimited plan with TWC, I guess we can deal with them.

bunderbunder5• 12 years ago

The baseline I had from years of living in a Comcast market is so rotten that I really was deeply, fervently in love with TWC for the first year or so after I moved to a market that they own. It was hard for me to believe that a cable company could really be that awesome.

Upshot being. . . yeah, Comcast is so heinous that simply spending any amount of time in contact with them will actually warp your mind.

zerohm• 12 years ago

In the past 5 years, I've had Comcast, Insight, TWC, and FIOS. (TWC bought out my previous ISP, Insight, less than a year ago)

By far Comcast was the worst of my experiences.

mroby• 12 years ago

They need a login to read the post? That's ridiculous.

pgrote2• 12 years ago

Run it through Google News.

https://news.google.com/news/search?q=Comcast+Acquiring+Time...

iandanforth• 12 years ago

I was proud of the DOJ Antitrust division when they objected to the ATT/T-Mobile merger. I can only hope they do the same here.

bryanpaluch• 12 years ago

It's a bit different in this situation. Comcast and Time Warner do not currently compete with each other.

rhizome2• 12 years ago

Something tells me that if that's the linchpin for the deal going through, it's not an accident.

logn• 12 years ago

Sad but true. They should deny the acquisition and then launch a lawsuit for unfair competition/collusion.

DannyBee• 12 years ago

and now, they never will, which would be the focal point of any antitrust attack.

Also, the DOJ does not have sole authority to challenge. Here is the breakdown for telecommunications (taken from DOJ website, http://www.justice.gov/atr/icpac/3b.htm)

  Telecommunications. Mergers involving telecommunications    
  service providers usually are subject to competition policy 
  review or challenge by:


  One of the federal antitrust agencies (only the DOJ has 
  jurisdiction to review mergers involving telephone 
  companies; both the DOJ and the FTC have reviewed mergers 
  between cable television firms);

  The Federal Communications Commission (FCC);(8)

  The PSC of each state in which the parties do business 
  (although most state PSCs lack jurisdiction over cable   
  television mergers and some lack jurisdiction over mergers);

  In the case of cable television, county and municipal   
  authorities with responsibility for granting and overseeing 
  cable franchise agreements;

  The attorney general of each state in which the merging 
  parties do business; and

  Private entities such as competitors to the merging parties.
  As with mergers involving electric power firms, review by 
  any of these entities is nonexclusive. Approval of a 
  transaction by one entity does not preclude a separate 
  challenge by any of the other entities, nor does it bar 
  another entity from seeking adjustments that exceed 
  concessions that resolved the concerns of other bodies.

I suspect the DOJ (who has sole jurisdiction in telecommunications) will object, and that comcast is just willing to fight it out in court.

beambot• 12 years ago

Isn't that simply because they have a "gentlemans agreement" not to have overlapping coverage, so that (to an individual customer) they are essentially a monopoly?

EpicEng2• 12 years ago

Right, by design, which is the reason I have crap internet service and no real choices. It's collusion, pure and simple, I don't know why it has been allowed to go on for so long.

ben1040• 12 years ago

Interesting timing, considering Charter's been preparing a hostile takeover attempt and was trying to push for a shakeup on TWC's board:

http://www.fiercecable.com/story/charter-recruits-time-warne...

ritchiea2• 12 years ago

Who benefits from large corporate mergers like this? What does an all stock deal mean at that kind of magnitude?

It certainly feels like little else than a handshake deal to create a monopoly.

fennecfoxen2• 12 years ago

At a minimum you can expect to fire some staff. You don't need two marketing departments coming up with ads, for instance. It won't quite be half the staff, but salaries are expensive (health care too).

gorner6• 12 years ago

Bigger scale, lower combined costs, more negotiating clout with TV channel operators, etc.

ritchiea2• 12 years ago

So monopoly

kawera• 12 years ago

Who benefits from large corporate mergers like this?

At first, the deal makers: executives, bankers, lawyers, auditors, consultants and assorted advisors.

Down the road... nobody.

Tsagadai• 12 years ago

In a word, shareholders. Many won't benefit but there is money in this sort of deal and it is likely going to the business owners.

crag• 12 years ago

"Who benefits from large corporate mergers like this?"

You might think the share holders. Not correct. Though they don't lose.

Think: the law firms handling the deal. This type of deal is worth millions in fees; banks - both investment (for finding the cash) and traditional (for providing the cash); and the governments which would levy taxes and fees. And of course anything below the public view (kick-backs, trips, outright campaign donations). I mean it's no surprise they picked a campaign year to merge. ;) The companies have probably been talking about this for at least a year.

It might not go through. If there is enough back lash from other companies. Happened with ATT recently. What will matter are other content providers (Disney, Fox, Viacom, etc etc) - though it wouldn't surprise me if they get certain guarantees they we won't know about.

Netflix doesn't really have any muscle on the ground to fight this. But if they could form a coalition of sorts, with the likes of Amazon, Google, Apple, FB, Twitter, (maybe even) MS and Sony (they have a stake in this too), etc, etc - combined they'd be a formidable force that Commcast/TM would have to deal with.

And then there's us. But I hold little hope for the american public to rally around any cause. Plus too many are too easily swayed.

My hope lies in a the coalition of net companies I mentioned.

pgrote2• 12 years ago

Oh, boy. Charter wanted them, badly.

suprgeek• 12 years ago

If this merger goes thru, (and the AnitTrust people would have to be really asleep at the wheel for that) two things are certain:

1) Americans can expect some of the worst Cable price gouging they have ever seen

2) NetFlix, Amazon Prime et al will become really popular as a result of all the customers saying "FU ComcastWarner"

rhizome2• 12 years ago

3) Centralizes putting the neutrality screws to Netflix, Amazon Prime, Itunes, et al.

delucain2• 12 years ago

I don't think your second premise is entirely true, since Comcast doesn't provide enough bandwidth for streaming services like Netflix and YouTube already. Those services are going to become harder and harder to use if anything.

mkr-hn2• 12 years ago

I have no problem with Netflix on Comcast's lowest tier. 6mbps, 10 TV channels.

jonknee2• 12 years ago

This would be a perfect point for the regulators to harp on for approval... No need to divest, just require a condition of the sale to provide a neutral network.

axus• 12 years ago

Does Comcast compete with Time Warner? I thought they had geographically separate monopolies

WaterSponge2• 12 years ago

I don't think they compete directly in vast majority of markets and for this to go through they will surely forfeit those smaller contested ones.

I think this will go through. Then they will have a huge "content and subscriber" stick to wave around at Aereo, Netflix, Apple and anyone else wanting to play the net content hero.

johnward• 12 years ago

This is what I was wondering. I live in an area that only had comcast an no other option. When I visit places it seems to be either Time Warner and Comcast but not usually both.

codezero2• 12 years ago

Another problem is that Comcast is an internet provider for a lot of people. It's actually my only option right now, so if I want to access that Netflix subscription, I still need to pay Comcast, so point 1) will make that all the worse since it's already clear they throttle heavily on Netflix, this will only make the degraded experience even more expensive.

nine_k2• 12 years ago

Looks like a VPN service for a few dollars more could let people circumvent the throttling.

gorner6• 12 years ago

Combining two companies which (to my knowledge) do not currently directly compete for subscribers would not violate any anti-trust laws I'm aware of.

The FCC previously had a 30% coverage limit but that was struck down by the courts in 2009: http://online.wsj.com/news/articles/SB125147230997266951

cenhyperion2• 12 years ago

2) NetFlix, Amazon Prime et al will become really popular as a result of all the customers saying "FU ComcastWarner"

Not when they're direct competitors to Comcast, Comcast is the only ISP for most people, and Comcast can legally charge Netflix et al out of the market.

chimeracoder2• 12 years ago

2) NetFlix, Amazon Prime et al will become really popular as a result of all the customers saying "FU ComcastWarner"

I agree with your first point, but your second point doesn't follow. If anything, Comcast will price gouge Netflix out of business, and we'll be back to being stuck watching their awful "On Demand" instead.

They can do this, because Comcast owns the content (NBC), the delivery mechanism for said content (cable TV), and the only delivery mechanism (broadband Internet) for their competitor (Netflix/Amazon Prime).

On the other hand, the (failed) merger attempt between AT&T and T-Mobile was the best thing to happen to consumers in a long time, due to the breakup fee that AT&T had o pay T-Mobile($1+ billion worth of spectrum).

I'm trying to imagine a similar silver lining that could happen here, though I can't think of any.

rayiner14• 12 years ago

To play devil's advocate, what it means is that Comcast has the better business model. After all, that's why Apple and Samsung dominate the cellular industry. iApps running on iOS running on an iPhone using an Apple A7 offers the ability to optimize the user experience and integrate the layers that vendors doing things piecemeal can't match.

If Netflix et al want to survive, they have to evolve from being mere middlemen, funneling someone else's content through someone else's pipes.

midas0075• 12 years ago

Netflix partnering with, or potentially acquired by, Amazon to take on other platforms makes sense. There needs to be consolidation and I think Bezos could do a better job bringing in bigger licensing deals.

chalst2• 12 years ago

They might want Netflix to survive in some form so as to avoid awaking the sleeping antitrust dogs. Same way as Microsoft found the Mac a useful argument against the "desktop monopoly" argument in the 90s.

ulfw4• 12 years ago

And how would this 'FU ComcastWarner' work in America? Anywhere you live you only have the choice of paying your cable provider, your telephone carrier or your wireless carrier for internet. - DSL infrastructure hasn't evolved in a decade or more. You're lucky to get mid-single digit megabits/sec. I had 0.7 mpbs offered to me in Mountain View by at&t. - Cable is the only speedy one, but they can price gouge you, limit the amount of traffic (see Comcast) and decide who to prioritize - Wireless is getting faster, but is severely limited in transfer packages. You'd be paying an arm and leg just to get a few Gigabytes in total per month.

So tell me - how does this 'FU ComcastWarner' gonna work? Move to the one or two towns that have alternative internet (e.g. Fibre)?

abvdasker• 12 years ago

They can do this, because Comcast owns the content (NBC)

You forgot Universal, which together still amounts to only a fraction of Netflix's content. There's a reason that Netflix doesn't carry many titles in their streaming service: it's already too costly to acquire the rights to stream them all. If Comcast were to raise the price on that content, Comcast could simply stop streaming those movies/shows. Given the size of their library at this point, I doubt any of this would be missed. The "content" you mention is no longer as critical to Netflix's business strategy as it used to be, especially as they move to more original content.

Aloha10• 12 years ago

Show me how Comcast and Time Warner Compete? They have 100% non-overlapping service areas.

If anything, I'd expect prices to stay the same, because they have far greater leverage over the other media companies.

dba7dba4• 12 years ago

the AnitTrust people would have to be really asleep at the wheel for that

Call me a pessimist but I think this will go through. Why? The lobbyists already sounded out (lobbied/paid-off/promised-job-in-future) enough people in govt to feel that this will go through, or at least there is enough chance of it happening.

I bet this will go through, especially using the point that they don't compete against each other (which would be stupid reason to accept by AntiTrust people). They were NOT designed to compete against each other in the first place. They were given geographic divisions by regulators for that very reason.

flavor8• 12 years ago

The lobbyists already sounded out (lobbied/paid-off/promised-job-in-future) enough people in govt to feel that this will go through, or at least there is enough chance of it happening.

I don't think that follows. AT&T / TMobile gave it a shot a couple years ago, and that was shot down.

unsignedint• 12 years ago

I wouldn't say it won't happen, but I don't know how much of #1 impact there will be considering it's already not practical to pull competing cable operator to begin with. (Unlike, mobile carriers, for instance.)

Obviously, I'm just speaking out from my experience, but how common it is that certain region is served by multiple cable operators? (And that you get to choose from?)

jader201• 12 years ago

As someone who bailed cable/satellite a long time ago in favor of OTA broadcast, I'm personally less concerned about the impacts this will have on cable vs. the impacts this would have on cable broadband internet (though I definitely agree with concerns expressed over the impacts of cable).

For cable, we have Netflix, Amazon, etc. as a possible alternative. And I guess for broadband internet, we always have DSL to fall back to.

But Google Fiber can't get here soon enough.

Istof• 12 years ago

I was thinking that they were already in a deep coma...

31reasons• 12 years ago

Its time Google provide internet access to the US with their Balloons. I would rather use slow free (neutral) internet than ComcastWarner.

chaosmonkey• 12 years ago

Well now we wait for things to get worse!

delucain2• 12 years ago

Will this really matter in the long run? I mean don't most cable companies have a local monopoly anyway? I don't think there are many Comcast subscribers who can switch to TWC. I know there's still a diversity of offerings across the market that will change, but that seems a minor thing compared to the fact that most broadband users don't have a choice who they get their broadband from anyway.

InclinedPlane• 12 years ago

The future isn't cable though, it's internet, and even the cable companies know this. In most places the best internet is still via cable. Having such a dominant monopoly would put them in prime position to gouge everyone in every direction.

Gouge downward by charging the consumers higher prices. Gouge upward by charging companies like netflix to have their content not be horrendously throttled over your pipes. With such a large customer base, it becomes much harder for folks to resist.

And, of course, with more customers they have more revenue, which better positions them for future acquisitions. Comcast already owns NBCUniversal, so they are already positioned to become an even larger media conglomerate.

iends• 12 years ago

It matters to me as a TWC customer. Luckily I have a choice between TWC and AT&T internet currently.

I don't want to do business with one of the worst American companies, too bad both my choices are just that.

dreamdu5t• 12 years ago

People get up in arms about them being monopolies and their solution is to grant them monopolies. It's stupid.

How about this? No monopolies at all. If I want to run cable and I get the easements, I should be able to...

harshreality• 12 years ago

Suppose there weren't any official monopoly grant from way-back-whenever to your existing local telco and cable companies. There would still be a de-facto monopoly or duopoly: The easement permitting process, currently entirely blocked due to the monopoly grants, would exist, but as a sham... with the (mono|duo)polies coercing city politicians not to let upstarts dig up roads or string new cables. I've lived in a city with lots of fiber being put in. It's a nuisance, and without vocal public support it's easy for entrenched ISPs to argue that the nuisance isn't worth the increased choice, particularly in markets where there is already "competition" between one [horrible] "cable" provider and one [horrible] "telco" provider.

mikeryan• 12 years ago

Non WSJ Paywall article

http://www.businessinsider.com/comcast-to-buy-time-warner-ca...

This is crazy I don't see how this can get past any sort of anti-trust. Particularly with Comcast's stake in NBC. Comcast would own both the content and distribution of too large a chunk of the broadcast industry.

fennecfoxen2• 12 years ago

To go with non-WSJ paywall article: non-paywall WSJ article!

https://www.google.com/search?q=http://online.wsj.com/news/a...

jonknee2• 12 years ago

Or even better, I setup Chrome to use a referer of "google.com" for all requests to online.wsj.com--no paywall or need to search for headlines. I'm sure there are other ways, but the extension Referer Control makes this easy as can be: https://chrome.google.com/webstore/detail/referer-control/hn...

FLUX-YOU2• 12 years ago

http://mediadecoder.blogs.nytimes.com/2011/05/11/f-c-c-commi...

Well, this might be one way it goes through.

fiatmoney4• 12 years ago

It would be insane to let this go through. They're both effectively monopolists in most markets they serve; allowing them to combine just allows them to exert more political influence to make sure they keep their monopoly and high profit margins. Their core business is very much a low-value-added, rent-seeking concern, which doesn't benefit from economies of scale except for in as much as they can increase their market power by reducing competition - a fundamentally zero-sum game.

Political influence is a major and underexplored negative externality of monopolies.

rayiner14• 12 years ago

Building the expensive infrastructure that Silicon Valley depends on to get its cat videos and advertisements to users is a low value add, rent seeking concern that doesn't benefit from economies of scale? Its exactly the opposite.

wmf3• 12 years ago

Does economy of scale start to level out above, say, 11 million customers?

fiatmoney4• 12 years ago

The most valuable infrastructure that Comcast and Time Warner run is ye olde copper coax lines in the "last mile", often built a long time ago and at a large public subsidy (either explicit or implicit via a grant of monopoly). What little infrastructure investment they do make (eg, laying fiber) is a result of actual competition, which would be lessened by the merger.

By way of analogy, having clean water is important, but water infrastructure is not high-value-added ("buy Water Premium Max Plus! only 79.99/month!"); it's a basic utility. The alternative to Comcast isn't "no internet", it's a public utility wire-owner. Which would provide roughly the same level of service that Comcast actually provides, in the vast majority of areas.

And exploiting a monopoly on infrastructure is almost the Platonic ideal of rent-seeking.

dba7dba4• 12 years ago

I'm not going to look around for balance sheets of these cable companies but they are doing FINE, even after building the expensive infra. Why? Because they charge BUCKS for it.

mayneack• 12 years ago

Man, Comcast and TWC were already go to examples of the problems of monopolies.

cenhyperion2• 12 years ago

How could this not be considered a monopoly over the majority of the US?

roozbeh182• 12 years ago

timewarner by its own is a monopoly. i dont think anything will change. I already pay 55 bucks for crappy 15 up 1 down speed.

_kst_• 12 years ago

Do you mean 15 down 1 up?

fiatmoney4• 12 years ago

I can't believe no one has yet even trolled the possibility that allowing this merger would be payoff for both companies' loyal service to the NSA.

blazespin• 12 years ago

The point is not to merge. The point is to use this as a negotiating point with the FTC. Ask for the sun, and end up with the moon.

davidgay• 12 years ago

So you get one part in 10 million (by mass)? Seems an expensive approach...

natural219• 12 years ago

I would welcome this merger. Give them 3 months, and let them demonstrate why the telecom monopoly is bad for business, consumers, and America.

FireBeyond• 12 years ago

And then what?

You think Standard Oil is going to be repeated?

Not a chance. The Republican Party/side of the country would probably be more likely to rebel at the idea of such “government interference in the private sector”, especially on such a grand scale.

roozbeh182• 12 years ago

who submits wsj articles no one can read...

tomasien• 12 years ago

Is this a PR move? Do they like paying lawyers? Leverage against the FTC? I mean, this is never going to happen.... right?

chimeracoder2• 12 years ago

I can't wait until we finally get around to relegating broadband providers as common carriers.

At the very least, we need a broadband version of Glass-Steagall, which forces ISPs, cable companies, and content providers to be separate entities.

The current situation is laughably awful for consumers. I can't imagine a single informed customer actually supporting the status quo.

nine_k2• 12 years ago

Among other things it would kill Google Fiber.

bluthru• 12 years ago

In theory I still don't like the idea of a content provider owning infrastructure.

WaterSponge2• 12 years ago

Not going to happen: http://en.wikipedia.org/wiki/National_Cable_%26_Telecommunic...

Just wait till Aereo gets screwed in their Supreme Court case. Then we really will be.

In fact no matter which way they rule in Aereo's case we are screwed. If they rule in favor of Aereo the content companies (Comcast owns NBC) will just start taking content "cable only".

bunderbunder5• 12 years ago

I think the grandparent is saying we need a new law to replace the current one.

The courts having upheld a decision on what the current law says doesn't really preclude the passing of a new law - the only time court decisions trump legislation is when the Constitution comes into play.

raldi• 12 years ago

Fantastic. Just imagine what we could with all the prime spectrum they'd be releasing.

beedogs• 12 years ago

Surely that would trigger a Sherman prosecution.

pdubs• 12 years ago

Unless I'm misreading this decision it merely upholds the FCC's right to classify ISPs as "information services" instead of "telecommunication services" because the Telecommunications Act is a bit fuzzy and leaves a lot up to the FCC. The FCC could decide to reclassify them as telecommunications services due to industry changes and I believe that this case would serve as precedent for them to legally do so.

adventured• 12 years ago

Classic peak of the market bozo move. Comcast is massively overpaying for a dying business that will be valued at 1/3 this price in three to five years. I'd mark this equivalent to the HP / Compaq deal, and the AOL / Time Warner deal (in which Time Warner allowed a soon-to-implode dial-up player to eat them).

TWC has a mere $1b in cash, and negative $22.8b in net tangible assets. Comcast shareholders just bought a massive black hole.

gremlinsinc• 12 years ago

With this announcement we as a community REALLY need to get behind Net Neutrality as much as we did w/ SOPA -- Companies like Google, Netflix, et al - should block all access to their sites from D.C. IP addresses as a protest to show them what 'Throttling' feels like.

knodi2• 12 years ago

THIS!!! I hope this happens!!

redwall_hp2• 12 years ago

Netflix and other services can throttle their subscribers, too. :D

shmerl• 12 years ago

Less competition, higher prices and worse service for those who will be unlucky enough to be in the area where there is no choice but to use these cable ISPs...

richforrester• 12 years ago

Dear HN: I'm not too familiar with the situation over there, and have what might be a dumb question.

Are there any companies that will benefit from this because they're already on their way to roll out their own lines? I'm thinking about things like Google Fiber, companies that are providing their own network to deliver internet over.

samgranieri• 12 years ago

This is bad

yeukhon• 12 years ago

One thing I find stupid is franchise. In NYC Comcast, TWC, Verzion and RCN get franchises. Sometimes living a block away from where one used to live means a different provider and you are locked. TWC isn't so badly in the last 2-3 years after the major pool expanison and relatively stable, but in the end, why the hell is FiOS still not available to me when they promised they would have it complete by now?

nandhp• 12 years ago

As far as I know the Verizon FiOS buildout is complete and there are no plans to expand availability. Last time I read about FiOS expansion, Verizon's official position was something like this:

Customers in areas not currently served by FiOS may be able to get 4G from Verizon Wireless, which is up to four times faster than Verizon High Speed Internet (DSL).

gaadd332• 12 years ago

Your options in NYC tend to be driven by the deals your building has made. My building has TWC, RCN and after Sandy destroyed the copper infrastructure FIOS. From what I understand about getting FIOS, it comes down to your building being big enough and receptive to having them wire it up. Most are not very receptive.

zacinbusiness2• 12 years ago

I hate TWC with a great and fiery passion. I literally shake when I think about the company. And from my understanding, most Comcast subscribers feel the same way about their service. This sort of thing makes me angry, not because I think the monopoly will be worse than it currently is. But because these mega-companies have so much power and influence that they can make their own laws. A free and open internet simply doesn't stand a chance against that much money. Because all of the protests will happen online. And if I'm ComWarner and I see a site protesting me what am I going to do? I'm going to ban hammer them. And if the public complains about it the I'll slip some judges a few mil each to get them to interpret the law in my favor. And that's the simple fact: America is one of the most corrupt countries. If not the most corrupt. Because our law makers at every level are in the pockets of billionaires.

existencebox• 12 years ago

There seems to be a lot of buzz around that technical solutions won't dig us out of this hole; and while I agree that we definitely need some dramatic power shift to happen, I feel like there are technical solutions on the horizon. There are a lot of compelling mesh network/darknet projects going on, fast forward wireless tech a few years, it may be more feasible than ever. Use your anger as motivation.

pasbesoin• 12 years ago

The Obama Administration had better prod some serious anti-trust consideration on this -- not to mention Congress.

The NBC deal a couple of years ago, and now this?

Meantime, my Crapcast service contains consistently more crap (as opposed to quality), for consistently more money.

Step by step, this country is flushing itself down the tubes. Ha... bit of an unintended pun, there. Fitting.

kevinalexbrown2• 12 years ago

Does it strike anyone else as curious that the two largest cable/internet providers merge, and it doesn't matter because they already don't compete? It might be a sign that something's odd if the premise is that there's no competition between identical products to harm in the first place.

dinkumthinkum• 12 years ago

I think business might be a little more complicated than you think. :)

Fasebook• 12 years ago

I think collusion might be more likely than you think.

bdhe• 12 years ago

Care to elaborate? I was a bit struck by that point too.

Aloha10• 12 years ago

No.

I believe in the concept of a natural monopoly for most utilities though - Building outside plant is horrendously expensive - it to me makes as much sense to have multiple cable providers as it does multiple sets of power/telephone/water/sewer infrastructure.

I'd even like to see a fewer wireless carriers (consider that each for carrier are spending billions of dollars to roll out what amount to essentially identical network infrastructure often even from the same vendors - how on earth does that even begin to make sense? We - the rate payer ends up paying for it in the end thru higher rates - economy of scale is a thing, and it works.

Having been in the industry for about 2 years now, looking at the spectrum, I believe that we have enough for two, possibly three really competitive national wireless carriers - as in a complete nation wide footprint. That means 20x20 LTE even in rural areas, plus whatever 2g (CDMA 1x or GSM) tech you need for circuit switch voice, and whatever legacy 3g you need too (EDGE and HSDPA or EV-DO), with the eventual goal of multiple 20x20 or 40x40 carriers once we can replace all the legacy stuff - but consider the current for a moment, that Sprint in Seattle on 1900 mhz only has 20 mhz duplex, and nothing on 800 at all - this is excluding the acres on 2.5, because of the obvious limitations of use with atmospheric issues.

That said - the only way natural monopolies do not become abusive natural monopolies is thru intense and careful regulation - mostly by setting a fixed rate of return for the infrastructure, and then building rates from that.

kevinalexbrown2• 12 years ago

I used to install internet for Comcast. I appreciate the natural monopoly line of thought, but I would love to see solutions that worked around it.

I'm not an expert municipal telecom policy, so I'm interested in your perspective, but I would propose a finite number of lines that companies bid for.

There's definitely benefit from a natural monopoly in cable, but I'm not convinced they outweigh the costs of alternative solutions.

thedaveoflife• 12 years ago

Conventional economics states that in a natural monopoly the state should be the sole provider.

masklinn2• 12 years ago

That said - the only way natural monopolies do not become abusive natural monopolies is thru intense and careful regulation

Or by getting the fed' to build and handle the infrastructural side, and lease it to service providers (see: interstate).

Then the expansion and improvement can be added to other infrastructural projects e.g. digging for a new interstate or rail line? Put that nice big bundle of dark fiber along will you? It'll serve.

einhverfr2• 12 years ago

That said - the only way natural monopolies do not become abusive natural monopolies is thru intense and careful regulation - mostly by setting a fixed rate of return for the infrastructure, and then building rates from that.

Or better yet, having the natural monopoly infrastructure, narrowly defined, run by local government and rented out at standard rates to all private service providers.... You know, have the city run roads, not taxi cabs.

The same thing could be done here regarding the internet component. City and local governments could set up last mile infrastructure and rent out access to these lines to ISP's....

igravious2• 12 years ago

This is very much in line with my own thinking.

Wireless (cellular/radio/tv/...) affords some competition.

Wired (power/water/sewage/copper/fiber) affords little last-mile competition it seems like. Unless municipalities made a real effort to make adding wire a simple proposition which does appear to happen in some places (Scandinavia springs to mind for some reason).

These are real issues that keep cropping up and it would be nice to do some actual social and economic simulations and historical analysis to see which models benefit whom.

The classic blunder in my neck of the woods was the British Rail privatization fiasco. Network Rail owned the tracks which suddenly ceased seeing any innovation and funding (so no high-speed-rail like practically everywhere else on the European continent). Train providers get their own non-overlapping corridors just like cable providers in the USA. Don't know if there is a limit to the train provider's size though. Same happened with water. Please correct me if I am wrong or painting this in too negative a light.

hrktb• 12 years ago

If think if there is a natural monopoly on a resource used as a lifeline or by more that half of the citizen, the infra should be under the government's oversight and the service privatized and open to competition.

Your wireless carrier example would be a single wireless network with as many as wished service providers.

This would slow down new technology deployments, but the market might be mature enough to get it's evolution slowed down two or three times without major inconvenience I think (for instance, we'd be stuck with LTE for a while if we go this way now ?)

boobsbr• 12 years ago

it to me makes as much sense to have multiple cable providers as it does multiple sets of power/telephone/water/sewer infrastructure.

That's how things work here in Brazil, some cities have 2 DSL providers or 2 cable providers. Big capitals may have both, and fiber. Also, there are a bunch o local radio providers.

It is way better for the consumer, as all of them suck and at least you can choose the least sucking one.

Telecom infrastructure is very different from electricity/gas/water/sewer infrastructure.

maxsilver• 12 years ago

I'd even like to see a fewer wireless carriers (consider that each for carrier are spending billions of dollars to roll out what amount to essentially identical network infrastructure often even from the same vendors)

The identical network infrastructure argument only works if you assume it's a big part of the cost. I don't think that's true, only a fraction of your cell phone bill is spent building or maintaining the network.

The tiny cost savings we would get by eliminating competition in Wireless aren't worth the huge increases in cost we'd undoubtedly have to pay in extra profit to those same organizations.

We only have to look at Cable / DSL to see how that ends. Or look at wireless carrier pricing before T-Mobile woke up and actually started to compete. It's not a coincidence that Sprint, AT&T and Verizon all dropped their prices as soon as T-Mobile woke up. They aren't eating those costs, every non-Sprint carrier can drop prices and still record millions of dollars in profit, even with their existing spectrum footprint, because their primary infrastructure costs are actually very low in comparison to the rates they charge for service.

- - -

Having been in the industry for about 2 years now, looking at the spectrum, I believe that we have enough for two, possibly three really competitive national wireless carriers - as in a complete nation wide footprint

I don't know where you get that. We have four carriers now, and none of them are hurting for spectrum, except in a handful of specific markets that are interrupted by other players or outside forces.

Seattle, for instance, has plenty of spectrum. However, some of it is being hoarded for speculation (Allen/Vulcan Inc sitting on 700a in Seattle and Portland comes to mind, or Dish sitting on nationwide AWS, or Sprint sitting on tons of 2.5ghz). If the unused spectrum becomes used, and the smaller carriers like US Cellular / Leap / Cincinnati Bell merge into T-Mobile / Sprint, everyone has a pretty decent playing field in every market nationwide, and there's plenty of spectrum for 4 nationwide carriers nationwide.

- - -

but consider the current for a moment, that Sprint in Seattle on 1900 mhz only has 20 mhz duplex, and nothing on 800 at all - this is excluding the acres on 2.5, because of the obvious limitations of use with atmospheric issues.

If your in the industry, you know that Sprint's problems are not spectrum related, they're all execution related. Sprint's got plenty of capacity on spectrum, they are just too cheap to deploy it properly. Seattle is a perfect example of this.

There are no "atmosphereic issues" with 2.5. There's no issues with 2.5, period. The only issue is Sprint trying to pretend 2.5ghz is 800mhz, and deploying 2.5 as if it is as low as 800mhz. The spectrum is not at fault, Sprint is.

Seattle's a major market, there's no reason downtown Seattle doesn't have Sprint small-cell 2.5 radios on every street intersection in the whole city - it would allow Sprint to offer multiple 20x20 LTE carriers on 2.5ghz to work properly, even indoors, throughout the majority of the city. Sprint phones shouldn't be using data over PCS in the urban area, except in the most strenuous of situations (deep underground).

Seattle's density supports this deployment, the tech is easily available, off the shelf equipment. Sprint's just not executing properly. Hopefully, SoftBank forces them to wake up and care about fixing their service.

brador• 12 years ago

One of the benefits of working with government agencies is they can pull strings that make regulators look the other way. This is a clear monopoly position, and it's being ignored. That's no accident.

pirateking• 12 years ago

Is anyone here familiar with the costs (regulatory and financial) associated with direct backbone fiber access?

phunge• 12 years ago

Verizon spent an average of $817 per household to deploy FIOS. Though that may not be the stat your asking for! :) Source: http://newamerica.net/sites/newamerica.net/files/policydocs/...

hydralist• 12 years ago

please google isp, destroy this new super-fool

PaybackTony• 12 years ago

I think I'm seeing some people here upset with the possibly deal because service already sucks (for both companies).

If that's how you feel, then this deal is good. One large company can be taken down much easier than two large companies. Just one less competitor Google Fiber (and other up-and-comers) have to deal with.

The part that irks me is that Comcast will own everything from the content, network all the way down to the subscribers. It just doesn't feel right that one company has that much power.

But then again, as a business owner, controlling your own destiny is your utopia.

amurmann• 12 years ago

Can we get a god damn amendment to the constitution that enforced net neutrality and prohibits ISPs from doing anything but being ISPs, already?! The net is part of the infrastructure of our country and needs to be neutral! Anyone who fucks with that should be charged with terrorism.

tn13• 12 years ago

Cable and Internet suck in American The Land of Free. I have TV Box from comcast which I have not switched on for year because it is absolute shit. It plays may be 10-15 channels and for any good channel I need to shell in so much money.

I am 100% sure that someone like Google will shark behind these people and drive them out of business.

yellowbkpk• 12 years ago

If you don't turn on your TV you should make sure you return your Comcast cable box because you're probably being charged at least $3/mo for it.

ulfw4• 12 years ago

You're free to pay a lot for little service.

squintychino• 12 years ago

Well, if you thought internet plans and prices suck now... Stay Tuned.

malkia• 12 years ago

I must talk to all my libertarian friends now. I need to get explanation what free market means when right now my only options for network would be one ISP.

JeffL2• 12 years ago

This has nothing to do with the free market. Both companies are government granted "natural" monopolies.

welterde2• 12 years ago

Huh? How is it something that the government granted?

namuol• 12 years ago

Free markets only work for spherical chickens.

knodi2• 12 years ago

Wow, comcast is a monopoly in this current state, after this it would be a super monopoly.

midas0075• 12 years ago

Ma bell of internet (TV's just about dead, and they depend on partnering with Verizon for mobile)

In other areas, AT&T dominates horizontally and vertically.

EpicEng2• 12 years ago

"Just about dead" is quite the overstatement. They did $32B+ last year in advertising revenue. I hope they do die a quick death, but it's going to be a while before most people cut the cord.

izzydata• 12 years ago

Still waiting for google fiber that is under construction 5 miles from my house. "Supposedly".

relik• 12 years ago

Now, instead of spitting on TWC vans, I'll get to spit on Comcast vans.

alexqgb2• 12 years ago

This is either good news or bad news for municipal ISPs. Good news in that you could hardly ask for a better catalyst. Bad news in that Comcast will have even more motivation to murder the entire concept in its sleep.

maceo• 12 years ago

The resulting Comcast would have 75% of the US cable market, if this goes through.

MachinaX• 12 years ago

Sounds really bad to me! I hope DOJ can stop this deal.

einrealist• 12 years ago

This might be an opportunity for the antitrust agencies, to force Comcast to open up their network to the competition like Netflix. I would not be so pessimistic about the deal.

mkempe• 12 years ago

Will net neutrality be a regulatory condition of the merger?

spikels• 12 years ago

We should be taking these guy's monopolies away. Competition is the key to not only good value (i.e. low price/value) but also economic fairness.

Ever notice how many of the biggest fortunes were built on top of government granted monopolies of some form, such as exclusive licenses, highly regulated industries, copyrights, trademarks and/or patents? Just look at the list of the world richest people:

1. Carlos Slim - telecom monopolies

2. Bill Gates - software copyrights

3. Amancio Ortega - clothing trademarks (brands)

4. Warren Buffet - highly regulated businesses

5. Larry Ellison - software copyrights

6 and 7 - Kock Brothers - highly regulated businesses

...

logicallee• 12 years ago

How is this legal?

antsam• 12 years ago

Wow, the new AT&T.

ulfw4• 12 years ago

Americans sure love their monopolies.

benmorris• 12 years ago

This really stinks. Just suffered through a transition to TWc from insightbb. Haven't been happy with the way twc operates. I can't imagine one mega cable company.

acd• 12 years ago

Since Time Warner was rumored to be the partner of AppleTV TV content, ponders how this deal affects that. Was it a plan to stop that Apple deal to happen or will they benefit from that?

Ponders if this will pass the antitrust authorithy

joeshaw• 12 years ago

I really, really want the regulators to stop this, but most people only have the choice of a single cable provider anyway. Where in the US do Comcast and Time Warner compete head-to-head? It feels as though they have divided up the country similarly to how the baby bells were after AT&T was broken up in 1984.

founder4fun• 12 years ago

Google please buy Verizon FIOs and all other fiber ISPs! Building out your own ISP is going to take decades.

A national Google Fiber is needed more then ever with this potential merger and Net Neutrality being struck down.

joelthelion• 12 years ago

Great news for internet access quality in the US! /s

kjhughes• 12 years ago

If you're wondering how this could possibly go through, see another WSJ article on the topic: "Comcast, Time Warner Deal to Spark Regulatory Debate, Outcome Uncertain"

http://online.wsj.com/news/article_email/SB10001424052702304...

Summary: On the one hand, there are the obvious consumer concerns about the impact on pricing and service if the two largest cable companies were to merge. Besides Justice Department and Federal Communications Commission review, Congress will likely seek hearings where they can be seen being involved in such a high profile matter. On the other hand, Comcast successfully practiced completing the 2009 acquisition of NBCUniversal from GE by agreeing to a wide array of commitments with the Justice Department, FCC, and state attorney generals.

Article concludes that the acquisition may well go through: "This is the first major merger review under new FCC chairman Tom Wheeler, who once served as the cable industry's top lobbyist. Mr. Wheeler suggested in 2011 the Commission should have allowed AT&T to buy T-Mobile in exchange for agreeing to a new slate of regulations. Lawyers and analysts in Washington believe Comcast could similarly secure the Commission's approval by expanding its existing regulatory commitments."

coldcode• 12 years ago

That's why the cable industry put this guy into that job, to make deals like this easy as pie. Soon we will have The Cable Company and The Phone Company. Or maybe just The Company.

_mulder_• 12 years ago

Competition Theory does suggest every market tends towards a Monopoly position. As companies get bigger and bigger, they acquire one another, until eventually there's only one huge 'Company' left. Of course, that's one reason why the free market is regulated.

lgama• 12 years ago

Prepare the Vaselin.

b3b0p• 12 years ago

I don't have access to Time Warner or Comcast. I currently have Cox and I have never had Time Warner or Comcast my entire life. I have only read online from sites like Hacker News or Ars Technica in the comments about how bad it is.

Could someone enlighten us with some points of how this possibly could benefit consumers?

Will they have more capital to build out fiber networks like Google has been doing to compete with that? If this goes through how much control can be put in place by the regulators to make sure pricing is not increased, they don't throttle or block out certain content providers such as Netflix?

Even though they server different markets it seems insane that this gets approved from the knowledge I have.

madmax96• 12 years ago

I might be mistaken, but I don't think that Comcast and Time-Warner compete in the same market, so the anti-trust people can't complain.

I feel bad for those poor Time-Warner customers, though.

martindale• 12 years ago

There is absolutely no way the FTC will allow this.

mynoseknows• 12 years ago

It's not like you ever have any choice with a cable provider anyway, the way it works is a cable company gets in bed with the local government and that's who gets to provide you with cable service.

I must be one of the lucky ones because I've had Comcast for over 10 years and the quality of service (customer service and cable/internet) has always been great. Pricing could be better but if you call they're always willing to give me promotional pricing deals, and there's always satellite TV and/or internet, DSL, or cellular.

dangayle• 12 years ago

Please don't let this happen. I hate Comcast and I hate it even more that it's really the only cable option where I live. I'd hate for that to be the case for everyone everywhere.

adamio• 12 years ago

"All Amazon hosted websites have been blacked out from Comcast Warner Cable while we undergo contract negotiations. Thanks for your patience, here's a free Video on Demand for the inconvenience"

mindslight• 12 years ago

This is yet another reminder to check out your local DSL options, like Sonic.net and Megapath. Hopefully the ones in your area haven't gone out of business yet from everyone getting duped into "faster" cable.

mjbraun• 12 years ago

In the past, I haven't seen much about how the "last feet" problem will be addressed in dense metropolitan areas. In multi-unit dwellings, often the wiring is still owned by the provider. So, even if you were to run fiber (municipal or otherwise) right up to the doorstep of a building, you wouldn't be able to cheaply run drops to every unit. In my previous readings, the laws in my area at least allow for provider "abandonment" or a buyout of the wiring, but I doubt those would help very much. I'd be interested in hearing if folks have seen otherwise, however.

D9u• 12 years ago

Damn! I finally got an acceptable deal from Oceanic Time Warner @ $60 a month for "up to 30 Mbit/sec" with no data cap. (I often see speeds over 50 Mbit/sec)

I hope this deal doesn't throw a wrench in my net connection. I live in a rural area with few options.

pyro56• 12 years ago

This merg will be the worst thing that could happen, 1) Prices of the packages will go up what will that do with the people who already have a package with TWC. Will it make there prices go up? 2) Who would trust comcast will all the talk of them throttling internet. Its will casue full chaos and they would end up losing more money then they would gain from the merg.

Comcast Acquiring Time Warner Cable In All Stock Deal Worth $45.2 Billion

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