Comcast-Time Warner merger still isn't good for consumers

It's now been a year since Comcast, the country's largest cable and broadband company, proposed a takeover of Time Warner Cable, the number two cable company and third biggest broadband provider. Since that announcement, a growing number of streaming services—including the just-launched Sling TV and the coming standalone HBO service—have appeared that offer compelling alternatives to traditional cable TV service. While it's tempting to believe that the market is sorting itself out in this instance and re-empowering the consumer, there are still plenty of reasons to be worried about a conjoined Comcast-Time Warner.

As Consumer Union, the policy and advocacy arm of Consumer Reports, points out in a release that debunks Comcast's five biggest promises about Time Warner Cable merger, combining the two companies would severely limit consumer choices—especially when it comes to broadband, which is swiftly becoming the most important home telecommunication connection. In fact, if the merger goes through, Comcast would have access to more than 30 million consumers in 16 of the 20 largest U.S. markets for multichannel video programming distribution (i.e., your TV feed). And it would reach 17 of the 20 largest U.S. markets for broadband Internet service.

Based on the FCC's current definition of broadband—a minimum download speed of at least 25 Mbps—a combined Comcast-Time Warner would represent 54 percent of U.S. broadband customers. So even if cord-cutters try to exercise their freedom of choice by shifting their TV viewing to over-the-Internet services, Comcast would still exert a worrying amount of influence over the Internet connections required to deliver those services.

And Comcast, through its earlier merger with NBC Universal, is also a major content producer with a vast amount of programming. That means the merged Comcast-Time Warner would be able to control the speed, quality, and type of programming for an unprecedented number of consumers. 

The proposed merger is still being reviewed by both Federal Communications Commission and the Department of Justice, which must grant permission for the deal to happen. Not surprisingly, many consumers are also viewing the the prospect of this merger unfavorably. A national survey conducted by the Consumer Reports National Research Center last year indicated that just 11 percent of the public supports the merger, while 56 percent oppose it.

"For a company with such a terrible track record with consumers, there's little reason to believe all the promises Comcast is making about this merger," said Delara Derakhshani, policy counsel for Consumers Union, in the release. "When you take a hard look at some of Comcast's biggest promises, they just don't hold up. What you can count on is continued price hikes, fewer choices, and more of the same lousy service that Comcast has become so notorious for delivering to its customers."

Although there's no immediate timetable for a decision, reports suggest that regulators could announce a decision in early spring. We'll continue to follow all the developments of the proposed Comcast-Time Warner merger, as well as those for other TV and broadband services, so check back for updates.

—James K. Willcox