Comcast-TWC Deal Dubbed the ‘Hotel California’ of Cable Mergers

Quoting the classic Eagles song, cable executives warned that there was “no check out” for customers wanting high-speed broadband

A top Dish Network official told a cable industry forum that regulators should reject Comcast’s deal for Time Warner Cable because of the problems it will create, while warning that the company’s potential for overwhelming control over high-speed broadband is insurmountable.

“We refer to Comcast/Time Warner as the ‘Hotel California’ of broadband,” Jeffrey Blum, Dish Network’s associate general counsel said in a forum at the American Cable Association Washington Summit. “Once you check in, you don’t check out,” he said, referring to The Eagles’ lyric: “You can check out any time you like, but you can never leave.”

Blum said the deal would leave 62 percent of households in Comcast’s areas with no other choice for high-speed broadband connections and also give Comcast too much control over the market for cable advertising and set top boxes.

“If you care about access to content for over-the-top, you should care about this merger,” he said, suggesting Comcast’s control of “must have” NBC programming would allow the company to charge third parties higher rates and make it difficult for rivals to compete.

Jon Leibowitz, a lawyer who represents Comcast, rejected those charges, saying that because Comcast and Time Warner Cable are in different markets and don’t compete for individual subscribers, the deal doesn’t pose antitrust issues. He also said the combination would spur innovation and infrastructure improvements that would benefit consumers.

Leibowitz predicted that the deal would be green lit by the government but with possible with conditions.

Members of the forum, which represents smaller cable operators, also heard suggestions that AT&T’s deal for DirecTV is more assured of winning government approval.

At a news conference, Matthew M. Polka, the American Cable Association’s president/CEO, and Robert Gessner, its chairman and the president of MCTV Ohio, suggested that their members could soon offer their own cable packages over the Web.

The executives said that the FCC is considering rule changes to ease the way for new rivals to offer cable channels over the Web, should ensure that existing cable systems have the opportunity to offer similar packages.

Gessner said that smaller cable systems may want not only to offer channels to non cable subscribers in their local markets but to offer their channels in other markets.