Gerry Smith Headshot

Silicon Valley: Stop The Huge Comcast Merger

Posted: Updated:
Print

After months of silence, the tech industry is calling on regulators to block Comcast's merger with Time Warner Cable, saying the deal would allow the combined company to thwart any rivals that threaten its business model.

In a letter to Sen. Al Franken (D-Minn.), Ed Black, president of the Computer & Communications Industry Association, noted that the two companies not only provide Internet and cable service, but also large amounts of video content.

If they are allowed to merge, Comcast "would be in a better position to discriminate against online websites and services that threaten its legacy cable business," Black wrote in a letter Monday responding to questions from Franken, who also opposes the merger.

Members of the association include Facebook, Google, Microsoft, Yahoo, eBay, Sprint, T-Mobile and the streaming TV startup Aereo, among others.

Comcast spokeswoman Joelle Terry said the company competes "actively every day against some of CCIA's members."

"We look forward to the many benefits this deal will bring to the consumers that Comcast will continue to serve after these transactions, benefits that the association ignores in its letter," Terry said in an email.

While Netflix has openly expressed opposition to the deal, most of the tech industry has stayed fairly quiet about the proposed merger. Many are likely fearful of offending Comcast because they've already cut deals with the company to ensure their web content travels smoothly through provider's broadband network

But the tech industry is now speaking out -- albeit through a trade association -- because it also has reasons to fear an even more powerful Comcast. Many tech companies are now also entertainment and media companies. Google owns YouTube. Amazon owns its streaming service, Amazon Prime. Yahoo is trying to be like Netflix and offer original programming.

Those companies rely on Comcast to deliver their content to consumers' PCs and laptops smoothly and without the dreaded buffering. But the merger could give Comcast more incentive to withhold or degrade the quality of competing web services, Black said. That's because Comcast would not only own video content it acquired from NBC Universal, including Hulu, but it would also own Time Warner Cable's catalog of local video content, including USA Network, Bravo, and NBC Sports.

"CCIA is concerned that this merger poses a significant threat to innovation and competition in many parts of the marketplace, including the layer that most users are familiar with: the websites, platforms and online services that the vast majority of Americans use everyday," Black said in the letter.

Regulators are still considering whether to approve Comcast's $45 billion purchase of its smaller rival. The deal would unite the two biggest cable operators in the country and give Comcast greater control over broadcast, cable television and high-speed Internet networks.

The Federal Communications Commission is also looking to create new rules that govern net neutrality, a separate issue but one that could determine whether Comcast and other Internet providers can give preferential treatment in the future to web content based on which companies have paid them.

Comcast has said the merger would not hurt competition because the two companies do not compete in the same markets. But consumer groups have said the merger would give Comcast too much power, stifling potential competition and eventually leading to higher prices.

Now they have the tech industry on their side.

This story has been updated with a comment from Comcast.

Around the Web

Comcast NBC merger - Wikipedia

Comcast + Time Warner Cable = Disaster | Free Press

AT&T Broadband to Merge with Comcast Corporation in $72 Billion ...

Time Warner Cable to Merge with Comcast Corporation to Create a ...

Tech Industry Trade Group Opposes Comcast-Time Warner Cable Merger

Comcast Today: Entire Tech Industry Opposes Merger

Survey puts Time Warner-Comcast merger in a harsh light

Tech Group Warns Against $45B Comcast-TWC Merger

New York State will conduct 'thorough' review of Comcast's merger with Time ...

 
From Our Partners