Monopoly is not just a board game, as we at the Foghorn have observed with trepidation at the growing monopoly that Comcast will soon have of the media markets. Comcast intends to purchase Time Warner Cable for a lump sum of $45 billion dollars in stock.
If the merger goes through, Comcast will be the biggest cable and broadband company by far, providing cable service to over a third of Americans. According to the Wall Street Journal, they would have 33 million subscribers compared to 4.3 million at the next largest company, Charter Communications. DemocracyNow reports that this merger means it would have a “a virtual monopoly in 19 of the 20 largest media markets.” The corporation has also just recently acquired NBC Universal in a controversial move in 2011.
Cable is not all that Comcast provides. They are also a dominant Internet service provider. USF Economics Professor Todd Fitch brought up an interesting point about the acquisition. He said that Comcast does not just face competition from cable providers now; it also competes with a plethora of internet companies like Netflix, Hulu, and Amazon: “Here’s where some form of “net neutrality” comes into play: if the cable [and phone] companies can limit, restrict, and/or charge higher prices for using their internet pipes — [keeping in mind that] Comcast is a huge player in delivering home internet connections — then they are likely to erode or eliminate the competition from internet-based providers.”
Yet, Comcast promises to provide consumers with better service. Comcast CEO Brian Roberts told MSNBC that the merger is “pro-consumer” and promised that Comcast will provide better products, faster Internet, more channels, and special local platforms.Even so, there will be no incentive for them to do so. Can we rely on Comcast to volunteer to provide better service?
The only way to avoid this acquisition and near-monopoly is for the United States Department of Justice Antitrust Division to block the bid. As Professor Emeritus of Economics at USF, Harmut Fischer, stated: “I am highly dubious about this proposed merger. It deserves lots of scrutiny by the Antitrust Division of the Justice Department.”
This proposed merger is a step backwards from the Television Consumer Freedom Act of 2013, proposed by Senator John McCain. McCain’s Act addressed the “bundling” of television channels, a money-making scheme used by cable companies. “Bundling” forces Americans to choose: either pay for extra channels they do not want, or forgo cable entirely.
“This is unfair and wrong – especially when you consider how the regulatory deck is stacked in favor of industry and against the American consumer,” said McCain. The Act aimed to “unbundle” channels, to give Americans the option to pick and choose what channels they want to pay for.
While something like choosing TV channels may seem trivial, it is important that the millions of Americans watching are given choices, and are not taken advantage of by billion-dollar companies. The way cable companies cheat subscribers through “bundling” is troubling enough, but allowing Comcast to monopolize two major media sources, cable and Internet, would allow further opportunities for unethical business practices.The Antitrust Division should unstack the deck and hand the remote control over to the American people. Let us choose what we want to watch, and which company we give our money to.
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