Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Senators, sports fan group urge Justice Department, FCC to block Comcast-TWC deal, (Apr 22, 2015)

By Edward L. Puzzo, J.D.

Six U.S. Senators have informed the Justice Department and the FCC of their opposition to the proposed acquisition of Time Warner Cable (TWC) by Comcast. Comcast and TWC are reportedly meeting with the DOJ today over its concerns about the proposed merger.

Senators. Senators Al Franken (D-Minn.), Edward Markey (D-Mass.), Elizabeth Warren (D-Mass.), Bernard Sanders (I-Vt.), Ron Wyden (D-Ore.), and Richard Blumenthal (D-Conn.) expressed their view that if the acquisition were permitted to go through, the combined entity’s “unmatched power in the telecommunications industry would lead to higher prices, fewer choices, and poorer quality services.” Sens. Franken and Blumenthal are members of the Judiciary Committee, which has antitrust authority, and Sens. Markey and Blumenthal are members of the Commerce, Science, and Transportation Committee, which oversees the FCC.

Currently, Comcast is the nation's largest cable company and the largest broadband internet provider. Its subsidiary, NBCUniversal, operates numerous popular TV networks, such as Bravo, USA Network, CNBC, Weather Channel, NBC Sports, and others. TWC is the second-largest cable company and third-largest broadband internet provider.

In their letter to FCC Chairman Tom Wheeler and Attorney General Eric Holder, the senators said that the combined entity, which would become “the overwhelmingly dominant cable and broadband internet provider in the nation,” would be able to defeat competing TV and Internet companies, stifle innovation in the industry, and, via NBCUniversal, have incentives and the means to extract higher prices from other video programming distributors and prioritize its own programming over that of competitors.

The senators also noted that—with only a handful of cable and Internet providers currently dominating the market—consumers, frustrated with increasingly high cable and Internet bills, are left with little choice but to pay the price a given provider demands. The proposed Comcast-TWC combination would drive out competitors, foreclose independent programmers and content, would only increase consumer costs. In urging the Justice Department and FCC to reject Comcast’s proposed acquisition of TWC, the senators stated, “This is an industry that requires more competition, not less.”

Sports Fan Coalition. Separately, the Sports Fan Coalition also urged the FCC and Justice to block the transaction.

“Sports fans have suffered for years as a result of anticompetitive behavior by Comcast and Time Warner Cable, and the record clearly shows that this proposed merger would make matters far worse,” said coalition Chairman David Goodfriend.

The coalition said that both Comcast and TWC “have a long track record of acquiring and hoarding the rights to sports programming, and then restricting fans' access to telecasts of local teams.”

“As sports increasingly move to online ‘Over-the-Top’ digital platforms, this merger would give Comcast more than 50 percent of the residential high-speed broadband market nationwide, giving this single company the power to decide which sports programming fans can and cannot access online,” according to Goodfriend. “Indeed, when Comcast's NBC Sports unit acquired the rights to televise the Olympics, it allowed only Comcast subscribers to watch certain exclusive online video coverage-a warning sign for sports fans who wish to continue enjoying their favorite sports content over broadband.”

Companies: Comcast Corp.; Time Warner Cable, Inc.; NBCUniversal Media, LLC.

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