TECH

Time Warner Cable Makes Hilariously Absurd Argument For Comcast Merger

05/08/2014 04:55 pm ET
Bloomberg via Getty Images

Anybody who's ever tried to stream a movie or use the web on a 3G or 4G LTE network knows it is no competition for a Wi-Fi connection, at least in terms of cost and reliability. And yet Comcast and Time Warner Cable, hilariously, want us to believe it is.

The two companies are currently engaged in a full-court press to convince regulators and lawmakers that Comcast's $45 billion takeover of Time Warner Cable -- which would create a behemoth of a company that controls nearly 40 percent of the U.S. broadband market and provides cable to almost a third of American homes -- isn't anti-competitive and is in the public interest.

One of their tactics is to rattle off a list of competitors, something Time Warner Cable CEO Robert Marcus was eager to do in a hearing before Congress on Thursday. Marcus, who is conveniently poised to earn a quick $80 million if the merger is approved, put mobile networks high on the list.

"I would also note that mobile wireless is rapidly becoming a viable alternative to cable broadband given the ever-increasing capabilities of LTE as well as continued advances in compression technology," Marcus said in a testimony in front of lawmakers on Thursday.

Except that it's not.

"To call wireless broadband a current competitor to cable broadband is a bit of an insult to the average consumer's intelligence," said Bill Menezes, an analyst who specializes in mobile services at Gartner, the technology research firm.

People typically get Internet access at their homes by plugging a modem into a wall and paying a company like Comcast or Time Warner Cable every month for service. Marcus is saying that people could ditch these modems and instead use 4G hotspots -- devices that connect to a cellular network and give off a Wi-Fi signal -- as their primary way of accessing the Internet.

That's ridiculous -- at least right now. Mobile networks are not yet any kind of competition for broadband in terms of either cost or reliability, Menezes pointed out.

Mobile data is much more expensive than data from a fixed network. With your wireless phone plan, you likely have to pay overage fees if you cross a relatively low data limit each month.

But let's say you want to ditch your broadband provider and use a 4G hotspot to stream Netflix. The biggest wireless data plan you can get from AT&T is 50 gigabytes per month -- enough to watch about 16 hours of Netflix in HD.

That's not much, considering the average U.S. household that's connected to the Internet uses 102 gigabytes per month, according to Cisco's Visual Networking Index. And that small data plan -- which includes unlimited texting and voice calling -- is going to cost you a whopping $375 per month.

And if you're one of the lucky ones with unlimited data? Sorry, but once you reach about 5 GB -- roughly two hours of streaming Netflix in HD -- some carriers slow your data.

And then there's the issue of reliability. I have a Verizon 4G LTE hotspot that I use for work when I can't get Wi-Fi, but earlier this week it wouldn't even give me a 4G signal while at a restaurant in lower Manhattan. I moved near the window, and the 3G signal I got was barely good enough to stream a video.

If the Comcast and Time Warner Cable merger is approved, Comcast will be the only option for truly high-speed Internet for 37 percent of US homes, according to Free Press, a nonpartisan advocacy group that opposes the merger.

Menezes said that in a few years, mobile networks could be a viable competitor. But a lot of that will depend on how companies charge you for data. And we all know wireless companies aren't exactly in the business of giving you a good deal.

Suggest a correction
Comments

CONVERSATIONS