Comptel, ITTA, NTCA Kick Off Anti-Comcast/TWC Campaign
ITTA, NTCA and Comptel banded together as expected to launch a campaign opposing the Comcast/Time Warner Cable deal. The Don’t Comcast the Internet campaign brings together competing Internet, video and voice companies seeking an unconditional denial of Comcast/TWC by federal regulators, the associations said at a news conference Monday.
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If approved, the deal would give Comcast “bottleneck control” over access to the Internet, the ability to raise content prices and have a chilling effect on new entrants into the broadband and set-top box markets, the associations said. They don’t want Comcast to be allowed to harm competition on the Internet as it has in cable TV, said Comptel CEO Chip Pickering. Comcast didn't comment.
Though all three associations had previously opposed the deal in filings to the FCC, they’ve joined together now partly in response to President Barack Obama’s call for investment in broadband infrastructure in his State of the Union speech, said NTCA CEO Shirley Bloomfield. Comcast/TWC would hurt many of the businesses that would make use of new broadband networks, discouraging such investments, she said. Working together as a group also allows the associations to pool their resources, said ITTA President Genny Morelli.
The Department of Justice is likely to disagree with Comcast’s arguments that it doesn’t compete with TWC, said former DOJ antitrust lawyer Jeffrey Blattner, now president of Legal Policy Solutions, who's working with the campaign. The geographic dividing up of the country among cable companies to avoid competition is “not a good thing” in the eyes of DOJ transaction reviewers, Blattner said. Federal regulators don’t have to believe that Comcast will shut off connection to Internet video competitors or block new entrants to justify rejecting the deal, Blattner said. Comcast would gain so much market power through buying TWC that conditions wouldn’t be able to alleviate it, Blattner said. “It would be like trying to dam the ocean." Blattner said that he sees “no indication” that conditions are being discussed by regulators.
If the deal is approved, it would have far reaching anticompetitive effects, said economist David Evans, who filed comments opposing the transaction on behalf of Netflix. Along with Comcast having the incentive and ability to block or slow competitors access to its subscribers, approving the takeover would set a dangerous precedent for how broadband and cable competition are measured, Evans said. Comcast would be able to continue buying cable systems it doesn’t overlap with, increasing its market power. The deal would also make it difficult for new entrants into the set-top box industry, said Steptoe and Johnson attorney Markham Erickson, who represents Netflix and has filed in opposition to the deal. Since Comcast would control so much of the market for such boxes and hasn’t traditionally encouraged its customers to use third-party boxes, the remaining slice of the market would likely be too small to make it feasible for new entrants, he said.