While many of you were sleeping last night, as rumored, the NYTimes reported that the nation’s number one cable provider, Comcast, struck a deal to purchase the nation’s number two cable provider, Time Warner Cable, for $45 billion. After Comcast sheds a few million subscribers to satisfy antitrust regulators, this would mean that Comcast would own about 30 percent of nation’s cable — and broadband — market. What does it all mean? Are we screwed?
The monopoly repercussions aren’t immediately clear, although anytime one company owns 30 percent of our nation’s most important resource — cable television and access to the Internet — there is certainly cause for concern. The merged company would certainly have more leverage in negotiating with individual networks over licensing fees, as losing 30 percent of one’s audience had a tendency to grease the wheels. although that is not an immediate concern for consumers.
The merger should not affect your cable choices. Comcast and Time Warner do not compete in many markets, so you’ll likely still have at least two choices, and if you live in a place like I do, that will mean choosing between the huge conglomerate with all the resources, or the smaller one with the better customer service (in other words, don’t expect customer service at the new company to get any better, since the newly merged company will now even more be able to say to disgruntled customers, “F**k you, what are you gonna do? Go to Spring Street? You know why their customer service is so great? Because it’s all they have, so good luck with that buddy.”)
It also means that NBC — currently owned by Comcast — will be now be owned by the nation’s largest cable provider, and while I don’t know what that means for consumers, that much power surely gives NBC an edge over its competitors.
But the biggest loser here is probably Netflix subscribers who currently use Time Warner Cable (like myself). Why? Because this deal isn’t about cable. It’s about broadband. Time Warner does not currently cap. Comcast does. That means that current Time Warner users are likely to get capped, too, which means if you watch a lot of Netflix, YouTube, Hulu, Internet Porn, or if you spend a lot of time on your PS3 playing with friends around the country, or if you have a large family with multiple smart phones, chances are you’re going to end up paying more. If you have a lower-tier broadband plan, you’re going to have to upgrade to get more bandwidth. If you have the highest available plan, and you go over the cap, you’ll have to pay overage fees. Overage fees are not cheap. If you watch four hours of Netflix a day, that might cost you $1.50 in overage fees. That adds up. Quickly. Suddenly, that $150 cable/broadband bill is $180.
So, while the Internet is still free, chances are, many of us are going to start paying more for access to it.