Comcast has been working diligently to increase acceptance of its proposed merger with Time Warner Cable. The $45 billion merger would give Comcast control of 40 percent of the country’s Internet service coverage and 19 of the country’s top 20 cable markets. This would make Comcast a vastly more powerful gatekeeper that could potentially disrupt the entire media and technology ecosystem. The outcome of the government’s review of the merger will affect virtually every media and tech company across the nation.
Netflix has vocally opposed Comcast’s proposed purchase of Time Warner. Netflix is opposing the merger because the deal would create a powerful giant with “anticompetitive leverage,” according to a statement made during its earnings report. The comment from Netflix drew a quick, sharp response from Comcast. In its response, Comcast suggested that Netflix was cloaking its business interests in pro-consumer rhetoric and simply did not want to bear the costs of the enormous amount of Internet traffic that its subscribers generate.
Comcast has contended that the merger is not anticompetitive because the company has very little geographical overlap with Time Warner Cable and that the content providers are the players with most of the power in their relationships. D’Arcy F. Rudnay, Comcast’s chief communications officer said, “The balance of power in carriage negotiations has tilted pretty decisively to the programmers’ side.” The belief is that if consumers cannot watch their favorite shows and sporting events, they will just switch to a different service that has them or go without them entirely.
The entertainment and communications industries seemed surprised by the statements, but it did not seem to rally many others to the cause. While Netflix has chosen to publicly speak out, some other companies are keeping any possible complaints to themselves as they try to negotiate the best deals they can with Comcast. However, many media executives echo Netflix’s concern about the deal privately, using words like “omnivorous” and “rapacious” to describe Comcast’s pursuit of the deal. One senior media executive who insisted on anonymity said, “Every company, including ours, knows how we feel about the merger, but the question is, Are we going to do anything about it? Who’s going to be the first to kick sand in the bully’s face?”
