Comcast's proposed $45 billion merger with Time Warner, which will transform the company into the biggest home broadband provider in the country, will also enable it to put the squeeze on online content providers. That's according to advocacy group Public Knowledge, which today filed new arguments against the merger.
"This market power in the last-mile distribution network means that a large broadband ISP -- such as a post-transaction Comcast -- can take actions that detriment its end user customers ... which in turn gives networks such as Comcast the ability to squeeze online content and service providers and cable programmers in ways that ultimately harm users and viewers nationwide,” Public Knowledge says in its filing with the Federal Communications Commission. The New America Foundation Open Technology Institute joined in the filing.
Comcast has argued that even though the merger will increase its broadband footprint, the deal won't result in less competition because Comcast and Time Warner currently offer broadband in different markets.
But critics of the deal say that it will leave Comcast better positioned to harm online rivals like Netflix.
Earlier this year, Netflix said its video streams sometimes were choppy because Comcast (among other Internet service providers) deliberately slowed down traffic. Netflix later forged “interconnection” deals with Comcast and other large broadband providers; those deals require Netflix to pay fees to interconnect directly with ISPs' servers.
Netflix -- which opposes the merger -- has said the deal will result in online video providers paying higher prices to reach Comcast's broadband subscribers.
Public Knowledge refers to the interconnection dispute in its filing, which points out that consumers themselves had no way of knowing why they were experiencing difficulties with their broadband connection.
Millions of ISP customers were caught in the middle of these disputes in 2013 and 2014 as their service degraded without explanation,” Public Knowledge writes. “Consumers had no reliable way to know that interconnection congestion was causing the degradation. ... Millions of people were swept up as collateral damage in a dispute to which they were bystanders.”
The watchdog argues that similar battles between ISPs and content providers are likely to recur if the merger goes through. “If the FCC allows it [Comcast] to buy Time Warner Cable, both its ability to engage in ... anti-consumer conduct, and its incentives to, would both increase,” the organization writes.