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Comcast's Big Deal: Is It Good For America?

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by Jon Friedman
February 13, 2014 12:42 PM
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Comcast announced Thursday that it agreed to acquire Time Warner Cable for $45 billion, combining the two largest cable operators in the nation.

Philadelphia-based Comcast will now thoroughly dominate the industry -- which doesn't sound like an ideal situation for individual customers. (When is it ever, in the wake of a huge transaction, like this?)

If the deal is approved by the federal government, the combined force will represent the U.S.' dominant provider of TV channels and Internet connections, extending to about one in three American homes.

What about the deal's impact on the lives of ordinary cable customers? 

When a virtual monopoly operates, the public tends to take it on the chin. There is the issue of quality service and repairs. Will that decline? Will it be harder for Main Street folks to reach out and communicate with the new behemoth? And what about the charges and the bills? Wlil customers wind up paying (a lot) more for their cable contracts?

CBSNews.com noted: "For many consumers, cable is a virtual monopoly. Neighborhoods or even entire towns may have contracts with a specific provider, which means a lack of competitive pricing. The long-standing theory is that wiring and maintaining an area is expensive and the provider doesn't want to do so only to have competitors ride off its work without having had to make any infrastructure investment." 

Watchdog organizations will vet the progress of the deal, for sure. 

As CBSNews.com pointed out: "However, local cable contracts come up for renewal, which is when competition can come into play. The fewer big cable providers competing for that town's business, the fewer potential bidders and the more likely prices will be higher. Collectively, consumers have less leverage."

Will the government throw up a roadblock? Chances are, the company's chief lobbyists have tested the waters and recommend going ahead with the deal. 

It will be fascinating to observe the machinations that will occur during the course of the negotiations between the government and Comcast.

I just hope that the powers that be will address the fundamental question at hand: Is the deal good for America? 

http://www.cbsnews.com/news/comcast-and-time-warner-merger-could-be-bad-for-customers/

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