The merging of the two titanic cable TV companies that will result if Comcast’s plan to buy Time Warner Cable for $45.2bn happens, means that the new company will have control of over a third of the cable market and have dire implications for internet TV streaming.
But the news has not settled well with consumer groups who say the mega-merger of cable giants will “throttle” choice as the new company will dominate broadband services across the Country.
Comcast who also own US network NBC as well as the Universal film studio, will have massive control of both the TV and broadband market, thereby having implications for internet TV services which rely on customers having access to low cost bandwidth.
Time Warner currently do not cap customers bandwidth allowance, but Comcast do. When TWC’s customers are migrated to Comcast, they may be limited in the amount they can stream from the web.
It is this grip on the market and lowering of choice that has consumers up in arms. Speaking for the internet rights lobby group, president Craig Aaron said, “In an already uncompetitive market with high prices that keep going up and up, a merger of the two biggest cable companies should be unthinkable. This deal would be a disaster for consumers and must be stopped.”
He said any merger would ultimately raise prices for consumers and stifle innovation, saying, “By raising the costs of its rivals and business partners, an enlarged Comcast would raise costs for consumers, who ultimately pay the bills. It would be able to keep others from innovating, while facing little pressure to improve its own service. New equipment, new services, and new content would have to meet with its approval to stand any chance of succeeding.”
Although Comcast and Time Warner are spouting how any deal would be great for the consumer, we know that any deal will bring about a monopoly where anything innovative that interferes with the cable giants profits will be shelved. Options will be reduced and competitors will be demolished by the cable monolith.
That means for internet TV viewers and cord cutters, any merger will be a disaster and could bring to an end the cheap internet based rival entertainment services. It could spell the end of Apple’s rumored TV streaming platform that would have brought cable content from Time Warner to non cable subscribers.
Streaming services like Netflix and Youtube rely on the cable companies who deliver content to customers at high speed. Comcast will dominate the market for broadband services with an estimated 30 million subscribers. And with the new Net Neutrality rules, they can throttle data sent by the streaming services. And they can determine what data caps customers have until they need to pay extra.
The only hope is that companies like Google Fiber, offering low price broadband that is not tied to cable TV can get a foothold in the market. And any deal which would create such a dominant company, will face intense regulatory investigation before approval by the Federal Communications Commission and the Justice Department.
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