Comcast Merger Will Not Keep TV, Internet Markets Free

It has been about a year since Comcast announced its intent to merge with Time Warner Cable, forming a cable and broadband behemoth in a deal worth $45.2 billion.

As a Republican who generally favors less government intervention and more marketplace solutions, I can say government does have a necessary and proper place in preventing harm to competitive markets. The federal government, however, can make matters worse in a media/telecommunications merger like this one, either by failing to recognize the threat to a healthy marketplace of ideas posed by some media mergers, or by creating a thicket of red tape and government regulations — forming merger conditions.

I am concerned the proposed merger will tip the scales against open, free, and fair access to programming with differing opinions from NBC, MSNBC, and other media outlets owned by Comcast. Sen. Mike Lee, R-Utah, Chairman of the  Senate Antitrust Subcommittee, stated in a hearing last year he is concerned about bias against conservative viewpoints. Sen. Lee is right. In many places in America, Comcast will be the only game in town — if the merger is approved.

If Comcast controls the cable and broadband systems in New York, Los Angeles,  Chicago, and many other major American cities — along with small towns coast to coast — the editorial policy of a few executives in Philadelphia will decide what lives or dies on TV — and the Internet. For anyone who does not agree with Comcast’s political viewpoint, that is a frightening proposition.

The Federal Communications Commission (FCC) is required to review mergers of this type to determine whether or not the merger is in the public interest. The Justice Department’s (DOJ) Antitrust Division also evaluates the transaction for anti-competitive harms a deal of this size, scope, and effect may have on the marketplace for cable TV and broadband services.

Both agencies appear to be taking a fine-tooth comb to this merger, which is a good thing.

In fact, Wall Street analysts recently noted that now, almost a year after the announcement, there is no clear timetable for ending the regulatory approval process and the merger appears to be on the thin ice. The risk, however, is that if regulators find potential harms, government lawyers might assume that hundreds of pages of cleverly written conditions to the merger will solve the problem.

In past media/telecommunications merger approvals, such conditions have mandated everything from what price a company can charge to what types of programming it will show. When was the last time more government red tape solved anything?

Granted, the proposed merger poses serious risks. A letter to the attorney general and the FCC by a group of more than 50 public interest groups said that the proposed Comcast-Time Warner Cable merger would give one company enormous power over our nation’s media and communications infrastructure.

This massive consolidation would position Comcast as our communications gatekeeper, giving it the power to dictate the future of numerous industries across the Internet, television, and telecommunications landscape.

The Comcast/Time Warner Cable merger is, at its core, about broadband — the most profitable and fastest growing segment of the cable industry. If approved, the combined company’s service area would cover almost two-thirds of the United States. It would be the only broadband provider delivering truly high-speed Internet and pay-TV services to over half of U.S. homes.

The merger therefore raises real issues regarding viewpoint diversity and competitive markets in next-generation media and communications. If they approved such a merger, the FCC and DOJ almost certainly would feel compelled to impose behavioral conditions.

Unelected government bureaucrats, however, are about the last people I would trust to come up with narrowly tailored conditions protecting competition and consumers for years into the future. Even if the government got some things right, merger conditions on a deal this size would be so detailed and voluminous the result would be heavy-handed government oversight of a major American media and telecommunications company. Not exactly what the drafters of the First Amendment had in mind.

A close inspection of the Comcast/Time Warner merger evidences grave concerns about whether or not the government by approving the merger would be creating another too big to fail model with cable and broadband that will again come back to haunt consumers now and in the future. We have learned a lesson with the financial collapse of 2008 — bigger is not necessarily better. We have learned that government red tape is not a terribly effective way to solve problems.

For all these reasons, the FCC and DOJ should give a simple thumbs-up or thumbs-down on this merger. No hedging, no convoluted conditions, just “yes” or “no.” From what I see, a thumbs-down is the best answer.