Given that Comcast is already the nation’s largest cable and Internet provider and the owner of a broadcast TV network, multiple cable channels, numerous local TV stations, a major movie studio, some theme parks, and a partridge in a pear tree, you might assume that people who make their living selling scripts to Comcast-owned companies would be reluctant to bite the hand that feeds them. But last week, the Writer’s Guild of America asked the FCC to block Comcast’s pending $45 billion deal to buy Time Warner Cable.
“The FCC should deny the proposed merger,” reads the 90-page WGA filing [PDF], which goes into detail about the already woeful state of competition in the TV industry; how the vast majority of Americans get their broadcast TV via a cable provider, and how deregulation and consolidation has resulted in only a handful of large cable companies providing TV and Internet service to most of the country.
While the WGA points to efforts by the likes of Netflix and Amazon to offer original programming that exists outside the traditional broadcast/cable model, it fears that “this progress is under threat from incumbent providers that seek to raise entry barriers and thwart new competition” with practices like putting data caps on Internet users or throttling downstream data speeds for services that compete with offerings from cable providers, discouraging them from getting more of their video entertainment from online sources.
“[T]he proposed Comcast-Time Warner Cable merger would threaten competition by giving Comcast control of one-third of the cable television and Internet service markets,” writes the WGA, which feels that the cost for entry into the cable/Internet market is so huge, “video distribution will never have robust competition unless the FCC takes action to limit anti-competitive behavior and lower barriers to entry.”
Last summer, Time Warner Cable got into a dispute with CBS that resulted in the network (and some of its associated cable channels) being blacked out for millions of TWC subscribers, primarily in New York City, Los Angeles, and Dallas.
The WGA asks the FCC to consider how vast such a blackout would be when you toss in Comcast-dominated markets like Philadelphia, Boston, Minneapolis, and others.
“Comcast’s ability to blackout one-third of television viewers would force networks to agree to terms and rates set by Comcast, harming investment in programming,” argues the Guild.
While Comcast would not have a national monopoly on cable and Internet service, the WGA filing contends that a merged Comcast/TWC would be so huge as to create what’s known as a “monopsony,” in which Comcast’s negotiations would effectively determine the rates paid by its competition.
Comcast has already said it will divest some of its current customers if the merger is approved and it will no doubt dangle a bunch of other carrots in front of regulators and legislators to try to lead them to the conclusion that the companies are giving up enough to justify the consolidation, but the WGA writes that “there are simply no conditions that can undo the harm a merged Comcast-TWC would cause.”