Comcast defends Time Warner Cable merger to Congress: ‘Bigger is good’
Comcast agreed to buy Time Warner Cable in an all-stock $45-billion deal that will allow the company more control over the U.S. market’s television, broadband Internet and phone services.
Comcast is making moves to finalize the proposed $45 billion deal that will allow it to buy rival Time Warner Cable. After the cable giants filed their joint Applications and Public Interest Statement with the Federal Communications Commission Tuesday, Comcast Executive Vice President David Cohen defended the deal in a Senate hearing Wednesday.
“The transaction will not lead to any reduction in competition or consumer choice in any market,” Cohen said to a skeptical Senate Judiciary Committee. “While this transaction will make us bigger, that’s a good thing, not a problem.”
Comcast cites the growth of non-traditional media companies like Google, Apple, Netflix, and Amazon — each of which Comcast already competes with in the video content marketplace alongside other traditional cable and satellite companies — as one of the reasons they are looking to grow. Cohen said he hopes the merger will give his company the “scale and reach” to make larger investments and more readily compete in a rapidly changing global media market.
Lawmakers, however, are concerned that the merger would give Comcast too much power over what consumers can view on TV and online, and that it will lead to a spike in cable and Internet prices.
“As Comcast continues to get bigger, it will have even more power to exercise its leverage and squeeze consumers,” Sen. Al Franken, D-Minn, said during the hearing.
Cohen struck back, saying “there is absolutely nothing in this transaction that will result in an increase in prices for Comcast customers.” He also said the merger would not eliminate consumer choice because Comcast and Time Warner Cable do not directly compete with each other in any U.S. market.
Others joined Sen. Franken in condemning the merger. “If we want more innovative, low-price Internet-delivered services, this merger must be rejected,” said Gene Kimmelman of Public Knowledge, a public interest group.
The Department of Justice is expected to review the Comcast/Time Warner Cable merger for violation of antitrust laws, while the FCC will look at the deal from a public-interest point of view. A decision isn’t expected for at least a few months.
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