By David Dayen, a lapsed blogger. Follow him on Twitter @ddayen.
Late Thursday, Comcast apparently signaled that they would abort a 14-month bid to purchase Time Warner Cable, in a deal that would have created the nation’s largest cable operator by a wide margin. The FCC was going to recommend a hearing, which is a prelude to cancellation. The spin is that there are more consolidation attempts on the way, but there’s no guarantee that they would be successful either:
The decision marks a swift unraveling of a deal that awaited federal approval for more than a year. Opposition from the U.S. Justice Department and Federal Communications Commission took shape over the past week, leaving officials of the two companies to conclude the deal wouldn’t pass muster […]
The deal’s collapse, a major setback for Comcast Chief Executive Officer Brian Roberts, sets off a cascade of recalculations in the businesses of broadband Internet and delivery of television and movies. Comcast must regroup to focus on adding more Internet subscribers and defending its pay-TV business, while Time Warner Cable could pursue other possible merger partners, such John Malone’s Charter Communications Inc.
“It’s the end of one chapter but the beginning of another,” said Craig Moffett, an analyst at MoffettNathanson. “The pace of cable consolidation is likely to accelerate rather than decelerate. It’ll just be Charter rather than Comcast leading the charge.”
That feels like a resigned justification to me. The FCC appears to be taking their public interest role a bit more seriously of late, and if they had problems with the consequences for consumers of a Comcast-Time Warner merger, a Charter-Time Warner merger could yield the same issues. In fact, the first step here will unwind a bunch of other deals: Charter was supposed to acquire some Time Warner subscribers from the merger, and Charter’s proposed deal with Bright House was also contingent on this deal.
I have to think the net neutrality decision played a major role here. It’s easier for Comcast to pack it in when there’s less money on the table. And Comcast seemed to be the problem here: the FCC came to the realization that they didn’t abide by their promises when they bought NBCUniversal, and any lip service on this deal would end in the same tatters.
Really this shows that regulatory prerogatives truly matter. Justice Department lawyers concluded that the merger wouldn’t help consumers, and FCC officials were about to conclude the same. There was some outside pressure from Sen. Al Franken and Common Cause (led by former FCC Commissioner Michael Copps), but opposition to media consolidation will always have trouble getting, well, media attention. Ultimately, for this to succeed, DoJ and FCC had to decide to do their jobs. And in this case, they did. (It’s not the first time: the AT&T/T-Mobile merger also failed in 2011.)
The revival of an antitrust posture, however tentative, is a very positive development. Matt Stoller wrote about a new antitrust agenda as part of Zephyr Teachout’s gubernatorial campaign:
Zephyr Teachout consistently drew her biggest applause line with “It’s time for some good old fashioned trust-busting.” She made a point of saying that big cable is too big, and that Amazon is a threat to open markets. Zephyr often said she is an old school Democrat. What she meant is not just that she backs more funding for schools, but that she believes in a redesigned relationship between powerful private actors and the state similar to the one implemented by FDR. This is first and foremost about a strong an antitrust agenda. Much of this can be traced to scholar Barry Lynn at the New America Foundation’s Open Markets Program, where Teachout was recently a fellow. An intellectual foundation rooted in a robust historical outlook has given Teachout the means to become a star, and this foundation rests on trust-busting in the private sphere and anti-corruption in the public sphere.
The fact remains that the demise of the Comcast-Time Warner merger means that the telecom space will in its current form exist as an oligopoly rather than a monopoly. Amazon has swallowed much of the e-commerce market and is coming for video content. The brief burst in original programming from a host of competitors (Netflix, Hulu, Amazon, etc.) is likely to shake out with one or two winners and a bunch of losers.
But the aggregation of power, particularly between a super-telecom like Comcast and content creators, needed to be arrested. And upstarts thinking of contending here can have the knowledge that the government won’t work against them to allow competitors to bulldoze their opponents. In fact, it’s working in the opposite direction. The FCC’s community broadband ruling opened a small crack for publicly provided Internet access, and this resistance to the merger aligns with that. This Google Fi thing could really alter wireless. Right now it’s still a bunch of big boys attacking other big boys, but the architecture is there to bust up big companies, and the regulators are starting to use it.
We need a return to a culture of trust-busting. The key regulators have come around to this, but with a new Administration coming in, that has to develop as a core value that officials cross at their peril. This victory will help.
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Well at least I’ll get to enjoy a little schadenfreude reading the Wall Street Journal today.
Hear, hear! And corruption busting, too!
Without going into detail, as someone who works in the industry, the sentiment among the executives for quite a while was that this merger going through was a forgone conclusion. However, I couldn’t determine if this was just the propaganda they were feeding us, if they had started to believe their own bullshit (never underestimate this), or if they really had bought enough influence to override the large amount of public opposition to it. I don’t directly work for them and am small potatoes even in that regard, so who knows.
I can say is that Comcast is the most aggressive of the MSOs by wide margin.
I had to look up MSO:
http://en.wikipedia.org/wiki/Multiple-system_operator
Guess the elites are content for the moment with their progress on TPP. Wonder how long that will last? Media coverage of TPP has been shameful. The average citizen can barely know the secrecy that surrounds it based on corporate media coverage and Obama’s blatant lies about TPP are given little if any challenge. Rachel Maddow – shameful. She cheerfully repeats WH lies in front of Liz Warren.
Don’t own tv and listen sparingly to radio, but it’s clear that TPP is being carefully hidden from view and/or touted – like NAFTA before it – as this hugely good thing for US citizens (as if). There is some coverage of it in my hometown nooz paper that is somewhat more informational. There have been a few editorials – both pro & con. But how many people really read the nooz papers and pay attention (besides me) these days? Precious few.
Avoiding TV is the first step to a genuine life.
Once the noise disappears, one starts to hear oneself* and discover the greatness within, that is inside each of us.
*reading all the time (as in 100%) is not healthy. One has a duty to oneself to write or to form one’s own thoughts. In the beginning, one should spend more time reading than writing, but at some time, a balance is achieved. One may end up writing or thinking much more often than reading.
A serious cyber site is also weighing in about and against TPP:
Corporate Sovereignty Trumps National Laws; Here’s How The US Thinks It Can Get Around That
If You Really Think TPP Is About ‘Trade’ Then Your Analysis Is Already Wrong
File under FWIW: when I came home to my pretty secure gated apartment community, I had some Comcast employee’s business card stuck in my front door jamb. Apparently had gone around the whole complex and stuck his card in everyone’s door. I don’t own a tv and don’t use wired Internet at home. Found it mildly interesting that this Comcast sales person did this after the “big deal” fell through.