Comcast Swallows Time Warner, With Democrats for Dessert

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Comcast’s blockbuster acquisition of Time Warner Cable for a cool $45 billion hit front pages again this week in anticipation of the Wednesday’s Senate Judiciary Committee hearing, which will review antitrust laws regarding services provided by telecommunications companies. Comcast will also soon have to lay its defense before the Federal Communications Commission, which will closely scrutinize the merger’s impact on public consumption.

According to the New York Times, the most crucial concerns should be raised over high-speed Internet service, not cable television. Comcast’s share of the high-speed Internet market is larger than its cable TV market share, as it holds between 40 and 50 percent of the market for high-speed Internet service. Comcast’s rising market dominance has upended net neutrality, a principle that prevents Internet service providers from blocking or privileging content. It has also strong-armed major companies like Netflix to the negotiating table. Netflix struck a deal with Comcast in order to preserve its ability to provide streaming services to its customers, but according to Netflix CEO Reed Hastings, it sets a dangerous precedent. He says in Slate, “If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future.”

“Crony capitalism” is a politicized term for institutionally supported greed. Comcast has leveraged its considerable financial assets to acquire its biggest competitor, and its political opposition. To make sure that the merger prevails, Comcast has already invested heavily in the Democratic Party, with generous contributions to the Democratic National Committee followed up by extensive lobbying. Executives from Comcast were present at the state dinner welcoming French president Hollande and his wife. Comcast will come out of this merger one of the most powerful telecommunications providers in the country, with the weight to make even otherwise big content providers like Netflix bend their knee. They have the money to play the Washington game and turn the tables in their favor.

Republican Sen. Mike Lee of Utah has already voiced his opinions on the principles involved in a strongly worded op-ed in National Review Online late last week. Without mentioning the merger, Senator Lee more broadly condemned the Obama administration’s participation in “crony capitalism,” claiming it was destroying market competition, harming the poor, and destroying the middle class. The op-ed went on to detail the benefits of true market competition and allowing small businesses to flourish to create job growth. Reaping political benefits from the line of argument will require more than words, however. Lee continued, “a still-distrusted GOP first must end cronyism in our own ranks. The GOP has to close its branch of the Beltway Favor Bank and truly embrace a free-enterprise economy of, by, and for the people.”

For years, corporate greed has been associated with Republicans, but this merger shows that political influence, Democratic or Republican, is for sale to the highest bidder. If the GOP leadership is smart, they’ll at least make the appearance of breaking away from allowing corporations to stack the deck in their favor, and towards championing local businesses that promote sustainable economic growth. The Senate hearing on Wednesday provides an opportunity to send a signal to the private sector that mergers are not insurable through fundraisers, and to take a first step towards winning back the public trust.


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17 Responses to Comcast Swallows Time Warner, With Democrats for Dessert

  1. Fran Macadam says:

    The merger further eviscerates competition, choice and American jobs. The economy becomes ever more hyper-efficient for the executives at making them money, less efficient for the population at large.

    Additionally, Comcast is known by both employees and customers to be duplicitous in routinely adding unwanted services and charges to bills and for making customers jump through hoops for using their own modems instead of buying new ones from them.

    The greediest of the greedy, further being empowered by a White House that’s betrayed the voters for its corporate donors.

  2. collin says:

    In terms of economic competition, TW is running short on breath here so they are going to merger with somebody out there. Unfortunately, it was Comcast in which makes a big player

    1) The real monopoly here is the local service not federal level. Most customers are with a local monopoly and will continue being a local monopoly.

    2) Bigger monopoly might be better negotiators against content providers. (Dish & Direct TV are in talks.)

    3) While on the fence on this merger (I think Comcast throwing money away long run) is pursue more competition on the local level.

    Mike Lee and the article also failed to mention The Obama administration already stopped a large merger with AT&T and T-Mobile that most conservatives did not agree with.

  3. Travis says:

    I turned my TV on last Wednesday 4/2 to find that about 20 channels, including most of the ones I actually care to watch (ESPN, ESPN2, MASN, MASN2, TBS, TNT, etc.) had been repackaged into another tier without notice. Working full-time and in school part-time, I have neither the time to schedule an appointment to fix it nor the dispensable income to pay for another upgrade. I can’t help but think it was tied to Comcast’s gobbling up of competitors, as I have very few alternatives.

    Can someone call Sen. Grassley and get me to the hearing tomorrow?

  4. jmm123 says:

    I’m not sure of the harm this deal would do to the public. Can someone expand on this?

  5. Spurwing Plover says:

    The demacrats might want to start invesigating their own kind many of them are corupt to the core

  6. cka2nd says:

    “If the GOP leadership is smart, they’ll at least make the appearance of breaking away from allowing corporations to stack the deck in their favor, and towards championing local businesses that promote sustainable economic growth. The Senate hearing on Wednesday provides an opportunity to send a signal to the private sector that mergers are not insurable through fundraisers, and to take a first step towards winning back the public trust.”

    Is this the best you’ve got? After literally decades of Republicans and Democrats alike ignoring or undermining anti-trust laws, with mainstream economists and libertarians offering “intellectual” justification for doing so, you want the GOP leadership to use a hearing to start asserting rhetorical support for local business? They already do that, while undermining local businesses at every turn. Conservatives need to make the case for anti-trust within their own movement, as TAC has started to do with public transportation.

    Serious problems require serious solutions, and sometimes compromise. Reviving anti-trust law and policy is one example, as are opposing free trade agreements and supporting unionization. Yes, conservatives should supports unions if you support higher wages and a republic instead of an oligarchy.

    I’m not holidng my breath.

  7. balconesfault says:

    If we want to reduce the impact of big money on government, to start with, it looks like we’re going to need a few new Supreme Court Justices.

    If you want to see the real lobbying power of Comcast et al in play, don’t look at the FCC btw. Look at Republican state legislatures across the country which have been passing ALEC proposed legislation to prevent communities and cities from providing internet service.

    It doesn’t matter if local residents and businessmen consider access to low cost high speed internet to be an economic boon to their community – local control is only important when it doesn’t clash with the interest of corporate donors.

  8. jacobus says:

    “a still-distrusted GOP first must end cronyism in our own ranks. ”

    hahahaha. Kick out the arms dealers, car dealers, real-estate developers and there won’t be anyone in the GOP left!

  9. Sands says:

    I feel bad for Time Warner customers. Comcast is literally the worst entity I have to deal with. Worse than any other company or even government agency. I would rather deal with the DMV than Comcast. Been plotting my escape since last year, but it is basically a monopoly if I want to keep sports channels and HBO. Can switch to dish for not much savings and an ugly dish on the side of my house.

    Even with consolidation like this, I feel were about five years from this market getting kicked wide open to true competitors through Apple TV, Amazon, Google, Netflix, etc. Finally the price gouging will end. At least I have to hope so….

  10. cka2nd says:

    collin says: “In terms of economic competition, TW is running short on breath here so they are going to merger with somebody out there.”

    How so, please? Was TW actually losing money or is it just that their profit margin didn’t satisfy the MARKETS (“All Hail the MARKETS!”)?

    collin says: “1) The real monopoly here is the local service not federal level. Most customers are with a local monopoly and will continue being a local monopoly.”

    Reducing the number of cable or oil or retail or airline or media or every other type of company at the federal level seems to have had a negative impact on competition at the local level pretty much accross the board over the last 35 years.

    collin says: “2) Bigger monopoly might be better negotiators against content providers. (Dish & Direct TV are in talks.)”

    So mainstream economic and libertarian theory keeps telling us, but I have yet to see this in practice.

    collin says: “3) While on the fence on this merger (I think Comcast throwing money away long run) is pursue more competition on the local level.”

    See balconesfault’s comment regarding ALEC for how that’s going.

    collin says: “Mike Lee and the article also failed to mention The Obama administration already stopped a large merger with AT&T and T-Mobile that most conservatives did not agree with.”

    Will wonders never cease! I didn’t think Obama had it in him.

  11. collin says:

    For all the complaints about the Ds being bought off on the deal (Realize the Rs are baked in), you realize stopping this merger is big government deciding winners and losers. (Mike Lee anti-TARP bank rant is so 2010 and meaningless here.)

    1) Again focus more on local decisions. Let Comcast dump a bunch of money to buy TW but then the state and city stop the monopolies. Cable and internet are local monopolies and they are the ones to foster the competition. Look a Google building internet lines in Kansas and they had to fight tooth & nail against Comcast. States freeing this market has much better potential than stopping the Comcast merger.

    2) Stop the endless IP rights for content. IP laws used to allow books and songs to go into Public Domain 28 years after their death. Movies are now endlessly protected and giving content makers a forever monopoly. (Think it about, all of Hitchcock movies would be ‘legally free’ on the internet without such Congressional action which have been called the Mickey Mouse laws.)

    3) Some of this cable consolidation (still a big part of the deal here) is based on big cable providers to push back on content providers. These cable and video wars (TW is suffering from the lost CBS war and overpaying for local Dodger games.) so I more comfortable with the cable providers mergering.

  12. balconesfault says:

    Five Republican appointed Supreme Court Justices made up the majority in Citizens United, and they declared that “Ingratiation and access . . . are not corruption.”

    In his opinion last week in McCutcheon, once again decided by the Republican appointed majority, Chief Justice Roberts dove into Citizens United to pull out this phrase once again and make it a lynchpin of his further erosion of limits on to what extent politicians can be purchased.

    We have a Republican Supreme Court majority determined to preserve and even expand a status quo where politicians are overtly “ingratiated” to those with the resources to provide them with large campaign contributions. This is, in John Roberts world, the way our system should work.

  13. RadicalCenter says:

    Travis: how about getting rid of your TV “service” entirely? Americans waste so much of their lives watching that box of vulgarity, perversion, stupidity, and propaganda. Yes, even “just an hour or two a day” is generally a waste. To each his own, of course.

  14. RadicalCenter says:

    balconesfault: True. So Obama, Reid, Pelosi and the assorted Democrats aren’t profiting from that same sick corrupt world of “ingratiation and access” through donations? They sure as hell are. Grow up, man, and stop thinking the Dems are any better than the Repubs. Both of them don’t give a damn about your freedom or mine, our prosperity, our country’s future, “fairness”, etc.

  15. Marko says:

    “If the GOP leadership is smart, they’ll at least make the appearance of breaking away from allowing corporations to stack the deck in their favor, and towards championing local businesses that promote sustainable economic growth.”

    Appearance, you say? Well, so much for a principled stand. I guess what matters first and foremost is the success of the Republican Party, not the Republic itself.

  16. balconesfault says:

    balconesfault: True. So Obama, Reid, Pelosi and the assorted Democrats aren’t profiting from that same sick corrupt world of “ingratiation and access” through donations?

    Of course they are. Unfortunately, the way our system is now structured, the only politicians who aren’t ingratiated to one degree or another are those who don’t get elected.

    stop thinking the Dems are any better than the Repubs.

    Sorry, but I see the Supreme Court justices who were appointed by Democratic Presidents supporting Congressional action on campaign finance, and supporting local and state ability to provide public financing for campaigns to offset the power of big contributors.

    And I see SCOTUS justices appointed by Republican Presidents, by virtue of their majority status, stripping away campaign finance limits and barring states and communities from providing public financing.

    I’m sure you’ll draw your own conclusions.

  17. RoKphish says:

    This merger would put more than a third of all cable-TV subscribers in Comcast’s hands and give it control over more than half of the “triple-play” services that combine TV, phone and Internet service. Don’t forget, Comcast already owns NBC, MSNBC, Universal Studios and tons of cable networks. That means that for most of America, Comcast could control even more of what you see and how you see it. 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.

    Tell your Representatives in Congress that you oppose the Comcast \ Time Warner Cable Mafia Merger
    http://bit.ly/Qlz4tJ