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Cable giant merger deal poses threat to net traffic, consumers

Despite assurances from Comcast that its proposed acquisition of Time Warner Cable is pro-consumer, there is growing public concern that consumers will be the losers if the merger is allowed to proceed.

With recent mergers creating bigger and bigger companies, Americans are seeing reduced competition and increased prices. It’s hard to see how Comcast’s proposed $45 billion purchase of Time Warner Cable will be good for consumers.

It’s true, as Comcast’s statements point out, that the two companies do not have overlapping services areas. But TV viewers and Internet service customers already have few choices, with most having only two services for television and Internet access.

It’s also true that the pay television industry faces new competition from Netflix, Amazon and Hulu. But the Comcast-Time Warner Cable merger is not necessary for either company to deal with the changing television watching landscape — both are billion-dollar operations.

Critics of the proposed merger point out that the national cable companies are notorious for poor customer service. In fact, Comcast and Time Warner Cable rank at the bottom when it comes to customer satisfaction. Would a merger encourage better customer service?

Adding to concerns over the consequences of the proposed merger is the fact that Time Warner Cable made news last year when it blocked CBS programming from millions of customers for several days over a pricing dispute with CBS. Will a combined Comcast-Time Warner impose more blackouts when negotiating with content providers?

And when it comes to content providers, it’s worth noting that Comcast bought NBC Universal last year, becoming a content provider as well as a delivery service. Will Comcast-Time Warner provide equal treatment or bandwidth speed, to content from other companies, which also are competitors?

Comcast CEO Brian Roberts says the merger is “Pro-consumer, pro-competitive, and strongly in the public interest.” He should be expected to back up those claims. On the surface, at least, it looks to be the opposite, with mostly Comcast’s corporate interests and perhaps pro-shareholders being winners.

The public should expect federal officials from the Justice Department and Federal Trade Commission as well as the Federal Communications Commission, which claims to have a pro-consumer and pro-competition mission, to critique this proposed deal carefully. With less competition, fewer choices, threats to emerging competitors, and probably higher prices, it’s hard to see how consumers win in this deal.

The combined company would control one-third of Internet traffic. How might it use that power to fight competitors?

Despite the growing public opposition and warning signals from public interest groups, the merger still could go through, given Comcast’s well-established presense in Washington, D.C. — the company spent $20 million on lobbying last year and gave $1.7 million to key lawmakers’ re-election efforts. It’s paid for sympathetic ears and friends in Congress.

The debate will be interesting to watch — and the outcome will say something about corporate interests versus public interest.

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