Comcast's planned $45 billion merger with Time Warner could wreak havoc on the open Web, consumer groups say.
Before the deal was even officially announced, organizations like Free Press and Public Knowledge sounded an alarm. “An enlarged Comcast would be the bully in the schoolyard, able to dictate terms to content creators, Internet companies, other communications networks that must interconnect with it, and distributors who must access its content,” Public Knowledge senior staff attorney John Bergmayer said last night in a statement. “It would be able to keep others from innovating, while facing little pressure to improve its own service.
Free Press said the “unthinkable” deal “would be a disaster for consumers and must be stopped.”
The organization Consumer Watchdog added it will ask the Department of Justice and Federal Communications Commission to block the deal. “The implications for broadband access to the Internet where we in the United States pay more for slower speeds than most of the rest of the industrialized world are dire,” said Consumer Watchdog's John Simpson. “Comcast would have no incentive to improve broadband service and would have the power to do what it wants.”
The merger, announced this morning, would leave the combined company with around 30% of the cable market, and half of the triple-play voice/cable/broadband market.
For its part, Comcast stresses that it doesn't currently compete with Time Warner, given that the two cable companies operate in entirely different metropolitan areas. Therefore, Comcast says, the deal won't affect consumers, or competition. “This is not a horizontal transaction,” executive vice president David Cohen said today during a conference call with the media. “There's no reduction in competition as a result of putting the two companies together.”
Cohen also points out that Comcast is already bound to follow net neutrality rules through 2018 as a condition of its merger with NBC Universal. (Those rules, which prohibit carriers from discriminating or throttling content, were invalidated last month by an appellate court. But that decision doesn't relieve Comcast of its obligation to adhere to the rules.)
But there's no guarantee that Comcast will follow neutrality principles after that date. And apart from neutrality concerns, there are also fears that Comcast will use its control over broadband to harm online video competition. Already some advocates have accused the company of doing so by rolling out data caps. The company is currently testing data caps of 300 GB per month (with overage fees fo $10 per 50GB) in some markets. But 300 GB is too low for users to replace cable video with HD streams, according to Public Knowledge, which recently called for an FCC probe.