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Is Comcast-Time Warner merger creating a beast or innovation?

Published: Tuesday, March 4 2014 8:36 p.m. MST

This Feb. 13, 2012 photo, shows Comcast service vehicles parked at a Comcast facility in Pittsburgh. It's become the routine in the cable industry that subscribers stream out the door every quarter, hanging up on cable in favor of service from satellite or phone companies. But in the October to December quarter, Comcast nearly managed to stop that flow. Dish is looking to push back against Comcast, which announced it'll merge with Time Warner. But is Comcast going to be too big to handle?

Gene J. Puskar, Associated Press

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Comcast might soon have control of the cable and Internet market.

But Dish — the No. 2 cable provider in the country — is pushing back.

Reuters recently reported that Dish is looking to get into the Internet market, having struck a deal with Disney to not only air stations like ABC and ESPN on regular television, but also on other methods of programming — like the Internet.

"The Dish/Disney deal appears to set the stage for a new wave of broadband-delivered video services," said Rich Greenfield, an analyst of BTIG, a financial research company, to Reuters.

Dish will be stepping into what will soon be a Comcast-dominated territory, if the merger goes through. A pair of maps recently published by The Huffington Post showed how the country is shaped in terms of Internet Service Providers (ISPs).

The first map shows a rather diverse nation, where Comcast is the majority in 18 states, but is surrounded by Time Warner Cable, Century Link and Cox in nearly all areas. But the second map, which is meant to represent the post-merger world of the Internet, shows a clearly dominant Comcast controlling 26 of the states in terms of ISPs.

“This is one of the big reasons why the pending deal has people so worried. Among the concerns are higher prices and even less helpful customer service,” The Huffington Post said.

Critics seem split between whether or not regulators should approve the merger. The Washington Post’s writer Brian Fung explained that Comcast said it’s going to treat Time Warner Cable subscribers equally and provide fair coverage across all platforms.

Doug Brake, a contributor at Forbes, said the merger will be great for consumers, as the company will have opportunities to expand its capabilities and grow in ways that a smaller company couldn’t.

“Innovation in technology, especially networks like broadband, benefits immensely from scaled operations. Comcast is incredibly good at scaling innovation throughout its network,” wrote Brake. “The efficiencies that would come with a merger can’t be ignored — scaled innovation is certainly one of them.

Conversely, Brad Reed at Boy Genius Report called Brake’s argument the worst supportive case for the merger ever.

“So yes, the Comcast-Time Warner Cable merger is going to be a hard sell with the public because people are smart enough to know that letting two hated companies become an even bigger, more powerful hated company is not a good thing,” Reed wrote. “For anyone who’s ever subscribed to Comcast or TWC, news of their merger is the equivalent of learning that Godzilla has decided to acquire Mothra to create one giant city-destroying hell beast.”

Email: hscribner@deseretnews.com

Twitter: @hscribner

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