Protect consumers on big deal
The proposed $45 billion merger of Comcast with Time Warner Cable would create a vast communications company providing 30 percent of Americans' telephone, Internet and television services, with dominance in most major markets. Such an overwhelming impact on the marketplace demands a hard look by federal regulators.
Telephones, television and the Internet have become necessary in most Americans' lives. More than 100 million Americans pay significant amounts monthly for telephone, television and Internet access. These consumers have a keen interest in the cost and quality of communications services.
Because the cable industry has already been able to carve the nation up into community monopolies, the Comcast-Time Warner Cable merger does not raise classic antitrust issues. The companies claim to serve different markets. The main competition for cable comes not from other cable companies but from telephone and satellite companies providing similar services.
However, the proposed merger would create a company with enormous influence over the marketplace for ideas and entertainment, as well as the technology and suppliers used by consumers to access media such as pay TV.
Reed Hundt, chairman of the Federal Communications Commission under President Clinton, told Reuters the deal, if approved, would "tilt the balance of power at every negotiating table in media and content and broadband and equipment industries."
Mr. Hundt added that it is "definitely too big to sail through either the Department of Justice or the FCC without serious, serious examination."
Congress should also look at the merger with consumer interests in mind. Among the issues involved is the crucial question of "net neutrality."
Last year a federal appeals court gave Verizon a surprising victory by striking down an FCC requirement that Internet service providers (ISPs) give equal access to all content and applications. That regrettable ruling will allow ISPs to discriminate by charging more for some services than others - and by excluding some services. Congress should correct that bad situation with legislation.
When Comcast bought NBC in 2011, it promised to treat all content equally - but only through 2017. And the Los Angeles Times cites evidence that Comcast is already skirting the agreement by giving preferential treatment to its pay TV service StreamPix, a competitor with Netflix.
There are also understandable concerns about the potential for another form of preferential treatment:
Brian Roberts, the Comcast chairman, has entertained President Barack Obama and top White House aide Valerie Jarrett at his estate in Martha's Vineyard, Mass., has played golf with the president and has served on Mr. Obama's Jobs Council. Mr. Roberts has been a generous donor to Democratic party coffers, giving $76,000 since 2006.
Comcast's top lobbyist, David Cohen, described by President Obama as a "great friend" at a 2011 fundraiser, has bundled over $2.2 million for Democrats since 2007, including $1.44 million for Mr. Obama's re-election, according to The New York Times.
That strong partisan link between Comcast executives and Democrats, including President Obama, should give federal regulators good reason to put the proposed merger through a careful review. Any hint of a fast-track approval would fuel suspicions of politically motivated favoritism.
But the biggest reason that this very big deal demands thorough scrutiny is its vast scope, which appears to pose a threat to competition - and thus, to consumer.s.