by Christopher Freeburn | April 8, 2014 11:41 am
Two cable TV companies are arguing that their merger will improve service to subscribers.
Time Warner Cable (TWC) and Comcast (CMCSA) — which agreed to a $45 billion merger deal in February — say that their combination won’t reduce competition in broadband, phone and video service. Instead, they contend that the deal will boost “innovation and investment.” TWC and CMCSA made their arguments in a 180-page filing with the Federal Communications Commission, which must approve the TWC-CMCSA merger, Variety notes.
Critics say that the TWC-CMCSA combination will give a single company a 30% share of the subscription TV market, restraining consumer options and eventually sending prices higher. TWC and CMCSA point to satellite providers like Dish Network (DISH) and DirecTV (DTV), which have grown their subscriber base in recent years as cable TV has shed subscribers.
In addition to competition from satellite service, TWC and CMCSA say they are under pressure from online streaming services like Google’s (GOOG) YouTube, Amazon’s (AMZN) Prime Service, Apple’s (AAPL) iTunes and Netflix (NFLX), which provide consumers with TV alternatives.
TWC and CMCSA also claim that their merger won’t negatively impact broadband competition, since they are not competitors in the regions they serve. TWC and CMCSA also argue that the combined company has no incentive to use its position as a major ISP to “interfere with its customers’ access to edge providers’ content on the backbone or the last mile” of its broadband network.
Shares of TWC and CMCSA both sank modestly in Tuesday morning trading.
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