Commentary

Comcast Merger Still Poses Threat, Critics Warn

If Comcast's $45 billion merger with Time Warner Cable goes through, the deal will extend the company's broadband footprint, leaving it as the only option for high-speed broadband in many U.S. homes.

That possibility worries many consumer advocates, who worry that Comcast will use its market power to hurt companies offering online video services. Those critics are now saying that even the Federal Communications Commission's new net neutrality rules might not prevent Comcast from leveraging its power over Internet access to harm online competitors.

Opponents argue in a new white paper that the post-merger Comcast -- which they call “Mega-Comcast” -- would be in a position to “harm competition, consumers, and the public interest” due to its new dominance over broadband.

“The Commission’s latest net neutrality rules ... do not mitigate the anticompetitive effects of approving Mega-Comcast,” the groups say.

The new net neutrality rules, which the FCC passed 3-2 last week, prohibit broadband providers from blocking or degrading traffic, and from discriminating among content companies. The regulations also contain a vague “general conduct” provision, which allows the FCC to take action if providers adopt practices that harm consumers or content companies.

Merger opponents offer a host of reasons why the order passed last week might not prevent Comcast from using its market power in ways that harm rivals.

The critics' simplest argument against the merger is that Comcast might not follow the new rules. “The merger would create a hugely increased incentive to defy any net neutrality constraints, as it would be vastly more profitable for Mega-Comcast to do so than it is for Comcast today,” they argue.

“Violations of net neutrality dictates by Mega-Comcast would be difficult to detect and harder to enforce... Each business relationship that Mega-Comcast would have, each point on its network, and each technology it employs could potentially be used to undermine its competitors.”

But even assuming that Comcast follows the rules, the company might still be able to impose data caps, critics say in the white paper. Comcast, like other providers, theoretically could discourage people from watching video online -- and shedding pricey cable video subscriptions -- by capping the amount of bandwidth that subscribers can consume, or by charging exorbitant pay-per-byte fees.

Opponents also point out that the rules are likely to face a court challenge that probably won't conclude for at least three years.

“Over that time, the rules may be affirmed or changed, or the FCC’s interpretation of them may end up leaving important aspects of Mega-Comcast’s market power entirely unconstrained,” opponents argue. “Such speculative protections are too thin a reed on which to approve this transaction.”

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