The two groups say the deal is “not in the public interest” and warned it would give Comcast too much power over cable and broadband
(Update at 4:39 p.m on Aug. 25)
Late Monday Comcast's competitor the Dish Network warned the deal would “significantly damage” the competitive environment and limit consumer access to online video.
(Update at 1:25 p.m. on Aug. 25)
Minnesota Sen. Al Franken, the Consumer Federation of America, Public Knowledge and a number of other consumer groups have urged the FCC to reject the merger and a Netflix spokeswoman told TheWrap the company will file its own comments late Monday night.
The Writers Guild America West and the Future of Music Coalition are adding themselves to the list of public interest groups urging the Federal Communications Commission to reject Comcast's purchase of Time Warner Cable.
As the FCC's Monday night deadline for commenting on the proposed deal neared, the two groups in joint comments said the deal is “not in the public interest” and warned its approval would give Comcast too much power over the markets for cable and for broadband connections.
“The proposed merger of two of the largest distributors of television networks will increase applicants’ power over programmers, leading to reduced affiliate and retransmission fees, which will limit the availability of innovative content from diverse sources, harming creative and economic opportunities for WGA-W members and ultimately reducing consumer choice,” the groups said.
“The proposed merger will give applicants incredible influence over how music is accessed and under what terms,” the groups added.
Both the FCC and the Justice Department are reviewing the implications of the deal. The Justice Department examines antitrust implications. The FCC reviews the implications of the deal on the “public interest.”
Also read: Comcast, AT&T Execs Tell Senators Mega-Mergers Are Good for Consumers and Innovation
In a blog post on Monday, Comcast cited the support community groups and public officials have offered the deal.
“We are gratified by the outpouring of thoughtful and positive comments from a wide range of supporters of the transaction reinforcing what we have said since the announcement - that this transaction is pro-consumer, pro-competitive, and strongly in the public interest,” wrote David L. Cohen, Comcast's executive VP and chief diversity officer. He noted that the governors of Maryland and Pennsylvania and more than 50 mayors including those of Denver, Philadelphia, Austin, Miami and Jacksonville support the deal.
Public interest groups have urged the merger be rejected. Last week Consumers Union and Common Cause said the deal offers no benefits to consumers and strongly disputed Comcast's claim that there is no issue because TWC's systems aren't in Comcast's markets.
WGA-W and the Future of Music Coalition offered a similar argument while emphasizing the increased control over Internet and cable the deal would give Comcast.
“Comcast is the nation's largest [cable operator] with more than 22 million cable TV customers. With 21 million Internet customers, it is also the nation's largest broadband Internet Service Provider. Now, Comcast proposes to increase its size and power as a distributor through the acquisition of Time Warner Cable.”
The groups accuse Comcast of creating a phony straw man–competition by Netflix, Apple, and Google–to argue that the deal is needed to compete.
“In an effort to divert attention from these facts, applicants invent an intensely competitive market that requires Comcast and TWC to merge simply to keep pace. … Netflix, Apple, Google and other OVDs do not own the facilities that distribute their content to consumers. These services rely on applicants to reach a significant share of the national market. The merging of two of the largest ISPs will significantly enhance applicants’ power as distributors, putting them in control of the direction of this burgeoning market,” the groups said.
The groups accused Comcast of using the tech companies’ high market capitalizations and annual revenues to obscure a rigorous analysis of their competitive effects.
Late Monday, Minnesota Sen. Al Franken, the Consumer Federation of America, Public Knowledge and a number of other consumer groups also urged the FCC to reject the merger and a Netflix spokeswoman told TheWrap the company will file its own comments.
Franken warned the deal would position Comcast “as a veritable gatekeeper over vast swaths of the nation's telecommunications industry, resulting in higher prices, fewer choices, and worse service for consumers.
“The proposed acquisition also would threaten innovation and economic activity on the Internet, and it would jeopardize the free flow of information and ideas on which our democracy depends.”
The Consumer Federation of America warned the deal would have severe impacts on consumers and competition.
“The Comcast-Time Warner merger poses a much greater threat to competition, consumers and the public interest than the Comcast-NBCU merger, which has not benefitted the public,” the group said.
It warned the acquisition of TWC would increase Comcast's market power by 50 percent “and create a Goliath that would take over the industry.”
Late Monday some of Comcast's competitors also urged the FCC to reject the deal. Dish Network warned the deal would “significantly damage” the competitive environment and limit consumer access to online video.
The satellite TV company said Comcast would have the incentive and ability to use the control it would gain over video competitors to foreclose or degrade online video offerings of rival providers in a number of ways. It called the the deal's public interests “unlikely and speculative.”
“The claimed benefits do not come close to outweighing the anti-competitive effects of the transaction, and the serious damage that will be inflicted on consumers,” said Dish. “The cost of ‘getting it wrong’ is immense. If the Commission approves the merger under a set of conditions purportedly designed to alleviate the harms, and those conditions fail to work, competition and consumers would be irreparably and permanently harmed. The risks are simply too great here.”