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Comcast-TWC Merger Raises Consumer Concerns

27 February 2014 - News - Editor

Comcast's $45 billion bid to acquire Time Warner Cable has raised a host of objections from various consumer and social action groups, with the main concern being that the merging of the two companies would dominate the cable television and broadband industry, edging out competition and leaving consumers with fewer choices. The combined company would have up to 33 million cable subscribers and close to that number of broadband users, a scenario which could give it the power it needs to influence networks with regard to licensing fees, as well has being able to set market rates on its products and services.

Some observers have suggested that the new company may even have the power to exert influence over what shows are broadcast to consumers on television sets, mobile devices and laptops. While Comcast has reportedly stated that it would not block competitors on its network, the expansion of the company in the United States will give it more control over what is referred to as the "last mile" – the line into homes and businesses. Some consumer groups have suggested that allowing one company to have such a huge chunk of the market is inviting the "Ma Bell" era to return – with the provider setting prices and even controlling the kinds of devices consumers can use to access services.

In order to avoid controlling more than 30 percent of the market, a figure deemed by television programmers to be the threshold for competition in licensing negotiations, Comcast has reportedly offered to drop 3 million of its subscribers. A senate hearing on the proposed merger is set for March 26, when Comcast and Time Warner Cable will have the opportunity to discuss their merger plans. Chairman on the Judiciary Committee, Senator Patrick Leahy (D-Vt) noted in his announcement of the hearing that the merger touches on policy issues regarding consumer access to the services provided by the companies in question. From Leahy's announcement it appears that the hearing may even extend to questions of internet neutrality – a hot topic of international interest at present.

 


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