Comcast-Time Warner Merger: FCC Promotes Competition, Comcast Not Worried
As federal regulators saddle up to the job of poring over a potential merger between cable giants Comcast and Time Warner Cable, Federal Communications Commission (FCC) Chairman Tom Wheeler delivered a speech last week that seemed to strike a dagger into the heart of the deal. Comcast, however, doesn't seem to think so.
In a speech titled "The Facts and Future of Broadband," Wheeler emphasized a theme that he has been pushing all year: competition helps drive innovation. Wheeler called for increased broadband development with the aim of providing both Americans and businesses access to high-speed Internet access.
"The underpinning of broadband policy today is that competition is the most effective tool for driving innovation, investment, and consumer and economic benefits," Wheeler said.
Citing a goal of 25 Mbps, Wheeler pointed out that only a quarter of the U.S. population has access to more than two choices when opting for a broadband service with that speed. In other words, a "duopoly" has emerged, Wheeler said.
"My goal is not to criticize, but to recognize that meaningful competition for high-speed wired broadband is lacking and Americans need more competitive choices for faster and better Internet connections," he said.
Many public advocacy groups took Wheeler's speech as a veiled threat against a Comcast-Time Warner merger. FCC scrutiny over competition has already caused Sprint to drop its bid for T-Mobile and many believe that coupled with growing concerns in key states like New York and California, the same ordeal will play out with Comcast and Time Warner. Concern is high across the board that combining the No. 1 and No. 2 cable providers in the United States will stifle development in much-needed areas as the new company looks for even more profits in proven markets.
Comcast executive vice president and Chief Diversity Officer David Cohen, however, isn't fazed by Wheeler. Cohen responded with a statement of his own Friday, pointing that Comcast and Time Warner Cable do not compete for customers anywhere in the country.
"To be clear, whether you are satisfied with the robust state of broadband competition today or deeply troubled by an absence of broadband competition, our transaction will simply not have a negative impact on the current competitive state of the broadband market in America today," he wrote. "In fact, the increased scale created by this transaction will accelerate and encourage even more investments in R&D, innovation, and infrastructure - all of which will be good for broadband investment and competition, and ultimately benefits consumers."
Lawmakers will formally review the $45 billion proposal in October.
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