A computer industry association formed by tech giants Microsoft, Google, Facebook, eBay, Yahoo and others is offering a major new challenge to Comcast’s proposed merger with Time Warner Cable. The group called the Computer & Communications Industry Association (CCIA) issued a loud new call Monday to regulators to reject the deal.
“Acute competitive problems already exist in the last-mile broadband access market and not only will this merger lead to even less competition, but it would make competitive entry less likely in the future,” said the letter signed by Ed Black, president-CEO. “Regulators should block this merger, not only for the good of innovation, the internet industry, and of consumers, but also for the sanctity of antitrust law itself.”
The group’s opposition came as Franken released a second letter in which Comcast Executive VP David Cohen formally shut the door on any extension of the Open Internet conditions that Comcast agreed to as part of its 2010 deal acquiring NBC Universal in order to win regulators approval of the Time Warner Cable deal. Comcast has touted the extension of those Open Internet conditions to millions of Time Warner Cable subscribers as one of the benefits of its latest proposed merger.
The NBCU conditions expire in January 2018 and binds Comcast to honor the terms of a since overturned Federal Communications Commission order that required internet providers to maintain Open Internet standards and not to discriminate against content provided by other companies.
In the letter, Cohen said that Comcast hopes and expects the Federal Communication Commission to adopt a replacement order before its NBCU commitment expires, but that Comcast doesn’t intend to be bound by a commitment its competitors don’t have to follow.
“The commitment was never designed to be perpetual in term,” said Cohen’s May 27 letter to Franken.
The letter from the CCIA offered a series of strong warnings about the effect of a Comcast and Time Warner Cable deal.
“The merged company would be better able to impede innovation that threatens to erode its legacy cable business model,” it said.
It warned that the original concerns that the Department of Justice had that the NBCU deal would give Comcast incentive to “encumber the development of nascent competition” would be exacerbated by the new deal.
“This merger would only give Comcast and Time Warner Cable even more ability to successfully harm competition and innovation in the greater internet ecosystem,” the letter said.
It warned that the merger would give Comcast the incentive and ability to:
–Raise the costs or degrade the quality of rival competitors such as Netflix and Amazon Prime.
–Withhold its own programming catalog from potential competitors.
–Use its buying power as the largest cable company to make it difficult for rival competitors to compete fairly.
“The internet is a fantastically innovative marketplace that has grown exponentially,” said Black in the letter. “Aggressive vertical integration by internet access providers has created a poisonous dynamic, where now internet access providers have a greater incentive to harm and distort open competition.”
Franken in a statement said the letters further buttress his view that the deal should be rejected by regulators.
“In my view, this deal would concentrate unprecedented power in Comcast’s hands–power that Comcast can use to harm competitors.” He called the letters another indication “that the proposed acquisition would stifle innovation and harm competition in the telecom industry.”