Netflix is sounding a new alarm over Time Warner Cable, telling the FCC that the merger would create the nation’s largest Internet onramp and give Comcast far too much control over online video.
The company warned that the deal puts at risk a key principle responsible for making the Internet “the most important communications platform in history.” Consumers should be able to choose what they want, according to Netflix.
“The threat to the [online video] market is significant. … The proposed merger would give the applicants the ability to turn a consumer’s Internet experience into something that more closely resembles cable television,” Netflix said in a filing late Monday that was posted late Tuesday.
Netflix co-founder and CEO Reed Hastings has warned about media consolidation and cable companies’ control of the Internet’s wires, especially in his strong support for net neutrality. The filing, however, represents the company’s strongest statement yet.
Netflix claimed that joining of two of the four largest Internet service providers would give Comcast the ability and incentive to harm competitors, either by disadvantaging existing rivals’ video streaming and making it impossible for new competition to develop.
“The ability of edge providers to innovate, grow and offer consumers new and exciting ways to enjoy online content depends on their ability to access high-speed broadband capable of distributing rich media and interactive content such as high-quality video.
“Applicants claim the transaction would be a net positive for edge providers, but the cold, hard economic facts and Comcast’s past behavior proves otherwise,” it added.
Netflix’s comments were filed as the FCC finished the first phase of seeking public comments on the deal. The agency has received more than 75,000 comments, more than 50,000 in the last month. Most of the people commenting oppose the deal. The FCC is required to decide if the deal is in the public interest. The Department of Justice decides whether the deal violates antitrust law.
The FCC heard from a number of supporters of the deal on Monday including mayors, state officials and local community groups.
“As President and CEO of the San Diego Regional Chamber of Commerce, I write today to urge the Federal Communications Commission to approve the proposed transaction between Comcast and Time Warner Cable,” Jerry Sanders wrote. “If the proposed transaction is approved, Comcast plans to invest heavily in advanced high-speed data infrastructure that will provide San Diego businesses a sturdy foundation for growth, while also offering much-needed competition for business-class telecommunications services for firms of all sizes.”
Both Los Angeles Mayor Eric Garcetti and New York Mayor Bill de Blasio urged the FCC to impose conditions before approving the deal.
Los Angeles County urged the FCC to reject the deal outright — and so did some rival broadcasters.
“The horizontal combination would result in a dramatic increase in the merged entity’s bargaining power and control over the video programming industry,” said Sinclair Broadcast Group. “The combined company could have sufficient size and scale to exercise significant leverage over competitors in the programming industry, including local broadcast television, and potentially to drive them out of business or to reduce their ability to compete for quality programming.”