Comcast defends merger as U.S. review kicks off
Gene J. Puskar/AP
By Alina Selyukh
and Liana B. Baker

WASHINGTON and NEW YORK -- Comcast (CMCSA) sought to rebut critics of its planned $45.2 billion takeover of Time Warner Cable (TWC), arguing that newcomers such as Google and Apple would ensure competition in both Internet and video markets.

In a 175-page filing with the Federal Communications Commission that coincides with the formal launch of the controversial deal, Comcast argued that either all or key areas of its and Time Warner Cable's businesses compete with an "array of sophisticated companies with national or even global footprints."

The U.S. Department of Justice will conduct the antitrust review and the FCC will examine whether the deal is in the public interest.

Comcast has pledged to divest some cable subscribers so the combined company would serve just under 30 percent of the U.S. pay television video market. The company said it would serve between 20 and 40 percent of the U.S. broadband subscribers. MoffettNathanson research estimates the company would cover about 33 percent of the high-speed Internet market.

Opponents have raised concerns that the combined company will have too much power over what Americans can watch on television and do online, becoming a powerful buyer of Web and pay-TV content.

The cable companies are expected to face those concerns on Wednesday when their officials, Comcast's executive vice president David Cohen and Time Warner Cable's finance chief Arthur Minson, testify in Congress.

In Tuesday's filing, Comcast argues that such concerns are unwarranted, especially given the growing competitiveness of both the video and internet markets.

The filing names (AMZN), Apple (AAPL), Google (GOOG), Microsoft (MSFT), Verizon Communications (VZ), Netflix (NFLX), Dish Network (DISH) and DirecTV (DTV) as companies making progress over the last decade in competing against Comcast with video content, while cable operators have lost subscribers.

"In the evolving video marketplace in which these companies have thrived, there is no reason why a cable company should be limited in evolving as well," Comcast said.

But Chris Lewis, vice president for public affairs at consumer interest group Public Knowledge, said that while all those companies do compete against Comcast,
the merged provider would have something the others don't.

"The great equalizer is that for many of those companies, they don't own the network in the high-speed video marketplace, which means [Comcast-Time Warner Cable will be] controlling the pipe into the people's homes," Lewis said in an interview.

An array of public interest groups have opposed the merger, and on Tuesday submitted a letter to FCC Chairman Tom Wheeler arguing that the merger of the the nation's two largest cable companies may create a gatekeeper for online and pay-TV content.

In Comcast's filing, the company reiterated that Comcast and Time Warner Cable don't directly compete in any markets, meaning no consumer would lose a choice of an Internet or cable provider, plus Comcast instead would boost the quality of Time Warner Cable's services and bring faster internet speeds.

The company also reaffirmed its commitment to so-called network neutrality rules, rules banning Internet providers from slowing down or blocking access to any content online that have been struck down as formal FCC rules in court in January.

Comcast, thanks to a condition placed on its 2011 merger with NBC Universal, is now the only company bound through 2018 to uphold net neutrality and has promised to apply it to Time Warner Cable's networks, too.

The FCC is now reviewing how to rewrite the net neutrality and the treatment of web traffic, including the fees content companies pay Internet service providers in so-called interconnection deals, is likely to be part of the agency's review of the merger.

Another public benefit Comcast touts in its filing is how it will be able to better serve large and small business customers, giving companies an alternative to telecom providers such as Verizon and AT&T (T).

Comcast shares traded at their lowest level Tuesday since the Time Warner deal was announced in February, a four-month low of $48.27 a share, and were about 1 percent lower on the day.

Comcast Makes Case For Time Warner Cable Deal To U.S. Regulators

Increase your money and finance knowledge from home

What Is Your Risk Tolerance?

Answer the question "What type of investor am I?".

View Course »

Investment Strategies

What's your investing game plan?

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

Comcast can't even handle what they already have....people are paying for phone,tv and computers servcies that don't even work most of the time..

April 09 2014 at 11:58 AM Report abuse rate up rate down Reply

The merger is not n the best interest of the public it is in the best interest of comcast because they will control content and they will dictate pricing. Once you open pandoras box its nearly impossible to close it. With that said the merger would also delete choice in which this is why we have these laws so that one company or entity cannot control the marketplace. So keeping the status quo is the best decision. I also will ad another issue once a company or entity becomes so big it is now the government that will bail them out should any financial issues happen which means all of us will end up paying to keep them running. We did it with the banks we did it with the auto makers we even bailed out freddie mac and fannie mae to the tune of almost 2 billion dollars. I dont believe that this merger will make it due to the extreme future issues this will cause and god help us if it does. Comcast will promise anything but deliver nothing but what it is created for money. There is no business format that comcast has or ever will since its inception is to grow and prosper regardless of anything and for that the FCC must control and commit to due diligence in the best interest of the people.

April 08 2014 at 8:47 PM Report abuse +1 rate up rate down Reply


April 08 2014 at 5:04 PM Report abuse rate up rate down Reply