Comcast's Competitors? Cable Giant Sees Many Rivals in Arguing For TWC Merger - Part 1: DSL and Fiber
In its FCC filing on Tuesday, Comcast put forward its argument why a merger with Time Warner Cable, the second-largest cable company in the U.S., would be beneficial to consumers, market competition, and Comcast's survival in the new media landscape.
The largest cable operator in the nation outlined its arguments in a blog post, and according to Comcast, it sees formidable competition everywhere -but in Time Warner Cable's markets. "It's understandable why any large merger will attract questions about competition and consolidation. But this particular transaction actually raises few competition concerns," said Comcast Executive VP and Chief Diversity Officer for Public Policy, David L. Cohen, in the blog post.
Comcast's argument is as broad as its market reach, and so this is the first in a Latin Post Tech series this week looking at it. Here's the first rundown of why Comcast doesn't see a problem in the proposed TWC merger, with some analysis and questions.
Competition From DSL
Despite arguing in its ad campaigns for years that DSL internet is not nearly as fast or robust as cable internet, the company argues that DSL is a valid direct competitor in most of the markets it, and TWC, reaches. But Cohen says that's changed, and cites that between 2008 and 2012, DLS-based broadband subscriptions grew at 26 percent annually, compared to 18 percent growth for cable broadband.
That's a broad statistic, and doesn't take into account the fact that DSL is generally more reachable for brand new broadband customers who've never previously adopted because of the cost. For many, a bundled TV/Internet cable package may not be an option, and as everyone knows, cable companies often push the bundle by making stand-alone broadband unreasonably expensive.
DSL has long been seen as slower than cable, but Cohen argues that "DSL providers offer speeds equal to or exceeding the FCC's broadband speed threshold," as part of the competition argument. But the top DSL speed Cohen could cite was 45 Mbps (with many below), which is only competitive in speed with Comcast's lower half of its broadband tiers.
Competition from Google Fiber
Comcast also found Google Fiber to be a competitor, if not now (because it's basically still an experimental program) then in the future. "Today, Google competes as a network, video, and technology provider, and 8 out of 9 of the next Google Fiber markets the company announced are in Comcast or TWC areas," stated Cohen in the blog post.
Google Fiber is far more of a competitive service than DSL, in speed and price. So much so that the service garners "Save Us!" petitions from communities tired of unreasonable internet and TV prices. But the 8 out of 9 areas Cohen cites are not "the next Google Fiber markets." They're potential markets. Google hasn't decided yet which ones have made the cut.
It's clear to see that Google Fiber is a threat in the markets it operates in, and that Google's broadband service is expanding, but how much of a threat it poses to Comcast currently (and especially if/after it merges with TWC) is up for debate.
Next Time On "Comcast's Competitors?"
We'll discuss Comcast's argument that wireless phone companies that offer 4G data, internet streaming services, and technology companies are also valid competitors, along with a look at the net neutrality issue.
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