Tuesday, August 26, 2014

Comcast and TWC respond to merger comments

Posted By on Tue, Aug 26, 2014 at 11:59 AM

Over the past few months, state regulators have been flooded with public comments for and against — mostly against — the proposed Comcast-Time Warner Cable merger. Staff from state agencies have submitted comments, too — which are basically recommendations regarding the deal.

Yesterday, Comcast and Time Warner Cable submitted their joint response to the comments, and what the company says isn't going to sit well with a lot of people. The companies dismiss many of the comments, including some from State Public Service Department staff; those staff members advise the Public Service Commission, which has to decide whether to allow Comcast to assume Time Warner's New York operations. (The sections starting on page 57 will probably be of most interest to members of the public following the merger review.)

Merger critics say that the deal would hurt competition, particularly for broadband Internet. But the companies double down on the position they've taken since the deal was announced: that the merger would not reduce competition because the companies don't compete in the same markets.

The companies say that "the transaction will change nothing about competition for such services and the number of broadband choices available to consumers. In fact, consumers have ample and increasing choice of broadband providers," including DSL, mobile data, satellite, and fiber optic networks.

In their comments, many critics also say they're worried about Comcast's use of Internet data caps (though the company says it's testing variable usage-based pricing in some markets, not data caps), and the ability of a larger Comcast to favor content from one source over another. They also worry that Comcast's promise to invest in and upgrade Time Warner's network would mean more expensive services, both video and broadband.

And the PSC staff say that the deal should be contingent on several conditions. For example, they want Comcast to keep Time Warner's basic $14.99 a month cable Internet package, and they want the company to commit to $50 million to expand cable networks to areas underserved or not served by cable networks.

The companies devote a lot of attention to the broadband-related comments, but ultimately they say that the PSC "has no authority to review broadband transactions and lacks statutory authority to regulate broadband services – and beyond this, cable broadband services are interstate information services that are not properly subject to state jurisdiction."

For similar reasons, the companies say that the PSC lacks the authority to require any broadband-specific investment, whether it's expanding rural service or boosting speeds. The company says it's willing to work with the state through the ConnectNY grant program, which is focused on expanding service to rural areas.

"Where economically feasible, Comcast has strong incentives to expand services in rural areas in order to gain new customers, including residential and business subscribers, and has demonstrated its ability to do so in prior acquisitions," say Comcast and Time Warner. 

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