Comcast and Time Warner Cable may be suffering from a business model that’s rapidly changing and pricing their services into oblivion, but they’re still highly profitable businesses. And highly profitable businesses like to merge. Or at least that’s the rumor.
Essentially, it would be a gigantic merger. How gigantic? Comcast would serve almost one-third of all cable subscribers if this went through:
But if such a deal were to be announced, it would expand Comcast’s cable empire to serving a whopping 33 million customers across the country, adding huge metro markets like New York and Los Angeles to Comcast’s already large footprint. Because a combined Comcast-Time Warner Cable company would be so huge, there has been talk that Comcast may partner with smaller cable operator Charter Communications to split up the customers and territory as a way to win regulatory approval.
There are roadblocks, but fewer than you might think. Because cable companies are oligopolies, Time Warner and Comcast don’t compete in the same markets, and “vertical” mergers have been largely given a pass by the courts. The real question is what the FCC would make of such a merger, as whether or not it’s in the “public interest” would be key. Concentrating most major markets into the hands of one gigantic corporation really doesn’t seem in the public interest, but the FCC has surprised us before.
That said, nobody thinks there wouldn’t be extra restrictions. For example, Comcast serving that many customers and owning a bunch of channels would probably be a bridge too far for most regulators, so Comcast would likely have to unload NBC. Considering that NBC couldn’t beat the CW in the ratings last Thursday and that football is possibly the only profitable thing the network airs at this point, that may not be such a hardship for Comcast.
Still, if this does happen, expect cord-cutting to start becoming epidemic. And expect Comcast to start getting a little feisty to keep that from happening.
I want more like this!
Follow us on Facebook and get the latest before everyone else.