Comcast Highlights Low-income Broadband in Quest for TWC Merger Approval

By Tara Seals March 06, 2014

An expansion of its Internet Essentials program for low-income families became a centerpiece for Comcast as it kicked off meetings with U.S. regulators this week, who will review the company’s $45.2 billion takeover attempt of No. 2 cable MSO Time Warner Cable.

The program was launched as part of the mandated concessions that Comcast made to gain federal approval for its mega-acquisition of NBCUniversal back in 2010. At the time, the program was set to run for three years. Now, under the terms of a TWC acquisition, it will be extended to TWC-footprint families, and it will run “indefinitely,” according to David L. Cohen, an executive vice president at the cable giant.

Because No. 1 cableco Comcast and TWC have no overlapping footprints, the arrangement would bring the $9.95 broadband package to “millions of additional families” in core TWC markets like New York, Los Angeles and Dallas, Cohen said, adding that Internet Essentials has enrolled 1.2 million people to date.

Cohen is in D.C. to hold behind-closed-doors preliminary meetings with the FCC, who, along with the Justice Department will need to give the cable giant its seal of approval for the TWC deal to go through.

It’s clear that Comcast wants to talk up the benefits of scale for U.S. communities. As Cohen said on a conference call with reporters, his “major job in Washington today is to talk about Internet Essentials.”

He also said that the combined company—which will serve between 30 and 33 million households, i.e., a third of the American public—will create “appropriate scale” to enable increased investment in innovation and new services.

These are arguments that Cohen has consistently been making in the press, but critics of the deal have been equally as vocal. Consumer groups have said that a combined Comcast-TWC would have the power to move whole secondary markets by way of its ability to buy technology like set-top boxes, home gateways or cloud technology. Essentially, any equipment manufacturer, developer, programmer or other ecosystem player would have to cut a deal with the new Comcast to stay viable. And those that Comcast doesn’t favor would have a much harder of a battle ahead to win an audience for their technologies. So ultimately, consumers could very well lose options when it comes to what’s available to the rest of the market in terms of ways to view TV and use broadband.

"If Comcast takes over Time Warner Cable, it would wield unprecedented gatekeeper power in several important markets,” noted Public Knowledge.

The combined company would also have outsized influence when it comes to negotiating network peering arrangements, especially in light of online video traffic, so it would affect the cost of carrying that traffic for others, certainly a competitive advantage.

“An enlarged Comcast would be the bully in the schoolyard, able to dictate terms to content creators, Internet companies, other communications networks that must interconnect with it, and distributors who must access its content,” Free Press added.   

Edited by Cassandra Tucker

TechZone360 Contributor

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