Comcast monopoly settles, door opens for Google Fiber

Published: Saturday, Feb. 22 2014 11:16 p.m. MST

Updated: Saturday, Feb. 22 2014 11:16 p.m. MST

Comcast Corp. announced Thursday, Feb. 13, 2014, that it is buying Time Warner Cable Inc. for $45.2 billion in stock. The deal combines two of the nation's top pay TV and Internet service companies and makes Comcast, which also owns NBCUniversal, a dominant force in both creating and delivering entertainment to U.S. homes.

Associated Press

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With the looming FCC approval of the Comcast/Time Warner merger, there are many who are up in arms and for good reason, according to Paul Krugman's Feb. 16 column in the New York Times.

Krugman points out that Americans have stopped worrying about monopoly power — something that will surely not only affect the market price of consumer goods, but also negatively affect innovation.

He goes on to agree that unchecked power of telecom giants has “removed incentives for progress: why upgrade your network or provide better services when your customers have nowhere to go?”

His bottom line: this merger is bad for everyone and everything except the companies involved in the merger.

On Feb. 21, the Consumerist’s Chris Morran wrote a piece warning DirecTV and Dish customers that they should be worried about the behemoth merger.

Morran writes that the merger between the “two largest terrestrial cable companies could have far-reaching consequences for all pay-TV subscribers.”

He quotes DirecTV CEO Mike White in a conference call to shareholders as saying, “If the deal is approved as proposed, it clearly represents an unprecedented media concentration in one company.” This is a point he later stresses when talking about competition and cost advantage.

What is also at stake with this merger and the future of cable and Internet service providers is keeping people happy.

According to Tech Republic’s Conner Forrest, cable and Internet providers are not held in high regard and “Internet access typically comes through a major cable provider with a monopoly on a particular city. In fact, the American Customer Satisfaction Index shows that ISPs have the lowest satisfaction rating of any industry in the U.S, even lower than airlines and banks.”

This could all change, according to Forrest, with the nationwide launch of Google Fiber that is already running in Provo and may select Salt Lake City.

“Google Fiber is the perfect storm of disruptive technology and it makes absolute sense as a business move. Internet service that is up to 100 times faster for a comparable price is not something that customers can ignore,” he wrote. “As Google Fiber grows, it will obviously disrupt the ISP industry as it potentially draws customers away from giants like Comcast, AT&T, and Time Warner.”

Erik Raymond is experienced in national and international politics. He relocated from the Middle East where he was working on his second novel. He produces content for DeseretNews.com. You can reach him at:

eraymond@deseretdigital.com

@RaymondErik

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