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Comcast And Time Warner Cable Merger

662 words - 3 pages

Most everyone subscribes to some type of cable service. When Comcast announced plans to merge with Time Warner Cable back in February, Congress was quick to criticize the deal (Popelka). Many members of Congress were not in favor of the merger, and rumors of an antitrust review were imminent (Popelka). "This is a great example of how U.S. antitrust policy has turned into a political game"( Popelka). Politicians may gain supporters, but no one is going to decrease the cost of cable service to consumers (Popelka). Antitrust laws were put into place for a reason. "The Sherman Antitrust Act was created to prevent monopolistic activities that diminish consumer choice or competition" (Popelka). In this case, the merger between these two companies will not take away consumer choice because they operate in different geographies (Popelka). Cable companies are struggling to keep up with the demands of younger consumers who are interested in online services instead of cable ...view middle of the document...

Comcast argues that they have never been in competition with Time Warner Cable because they serve different markets (Carr). Another question about the merger is if this is really about cable (Carr). Cable television is declining as the merger goes "through the regulatory process" (Carr). Comcast will keep under the 30 percent threshold, but will gain 40 percent more control of high-speed internet (Carr). Other cable television satellite companies will not be able to provide that service so they will not be able to compete with Comcast (Carr). These are just some of the questions that Comcast may face from the Judiciary Committee (Carr). The Judiciary Committee will be looking for any antitrust implications, and the F.C.C. will have their own array of questions (Carr). The talk of this merger is evident in the stock market as the stock prices for both companies have declined (Carr). Michael Copps of the F.C.C. said, "There's a strong case to be made why this merger shouldn't be approved" (Carr). The spokesman for Comcast, Mr. Cohen, believes the merger is not as complicated as those opposed make it out to be (Carr).
Competition is healthy for the market and for consumers. When the word monopoly is mentioned, consumers automatically assume the worst. Antitrust laws were created to prevent monopolies and maintain competition. The HHI is used by the Justice Department so they can decide if a merger should be approved. There are two sides to this merger, and the Justice Department wants to ensure competition will still exist in the industry without one company controlling the market. Comcast seems to be making moves to ensure they meet the guidelines that are enforced for a merger to be approved. Comcast will face tough questions in the days ahead and if this merger is challenged by the Sherman Act, it will become a costly event for the government and both cable companies.

Works Cited

Carr, David. "Questions for Comcast as It Looks to Grow". NYTimes.com. The New York Times
Company, 6 April 2014. Web. 7 April 2014.
Popelka, Larry. "Comcast-Time Warner Merger is Good for Competition-and Consumers".
Businessweek.com. Bloomberg L.P., 18 Feb. 2014. Web. 7 April 2014.

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