Comcast, Time Warner Cable defend proposed $45 billion merger

“Executives from Comcast Corp. and Time Warner Cable Inc. faced a tough audience in Congress Wednesday, as lawmakers questioned whether the proposed combination of the nation’s two largest cable companies would provide benefits to consumers,” Brent Kendall reports for The Wall Street Journal.

“Senate Judiciary Committee Chairman Patrick Leahy (D., Vt.), during a three-hour hearing on the $45 billion deal, said the merger wouldn’t lead to lower cable bills but would reduce the number of competitors in the cable and broadband space. ‘How specifically does it help the consumer?’ he asked,” Kendall reports. “Comcast Executive Vice President David L. Cohen said there was nothing in the transaction ‘that will cause anyone’s cable bills to go up.’ Consumers, he said, ‘are in the driver’s seat, both for broadband and in particular for video. There are a vast number of competitive choices.'”

“Mr. Cohen said the merger would provide consumers with faster broadband, greater network reliability and access to a wider range of video choices,” Kendall reports. “Lawmakers have no direct role in deciding whether the cable merger receives government approval. That decision lies with the Justice Department and the Federal Communications Commission, which are in the early stages of their regulatory reviews. That process could take the better part of a year.”

Read more in the full article here.

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  1. “…early stages of their regulatory reviews. That process could take the better part of a year.”

    Gotta allow enough time for all the outstretched palms to get in line for their take. If everybody gets paid up, the deal will go through.

    1. Here are two quick reasons.

      1) Cost. You have to build your own ‘plant’ next to your competitors, and then at best (for both companies) get 50% of the available subscribers. You would actually need to charge MORE to pay for the same plant with fewer customers.

      2) Logistics. There is only so much space on power poles to hang more cables. They are already crowded with power, phone, cable, and fiber. These have a regulated spacing below power and above roads/property.

  2. Mandate that if they want to merge 25up /100 down as lowest speed, for $40 locked in for 5 years and it can only go up with inflation after that 5 year point. No throttling, except torrents abusers. See how they like that. See how they like the mandate.

  3. Of course they’ll find a reason to raise prices, and cut staff. They need a return on their investment of $45B. Plus they still need to make a profit on the existing liabilities. That’s two layers of profit instead of one.

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