Cable giant Comcast has fired up its messaging machine to promote its proposed US$45.2 billion purchase of fellow cable television and broadband provider Time Warner Cable, arguing the deal will benefit Time Warner’s broadband customers.
The deal will bring faster broadband speeds to customers of Time Warner Cable, with Comcast offering speeds of up to 505 Mbps in some markets, Comcast Executive Vice President David Cohen wrote in a blog post Tuesday.
Comcast also filed a statement defending the public interest benefits of the deal with the U.S. Federal Communications Commission on Tuesday, a day before the company faces a Senate Judiciary Committee hearing focused on the deal’s impact on customers. The FCC and the U.S. Department of Justice are reviewing the proposed deal.
Critics of the deal, including Senator Al Franken, a Minnesota Democrat, have raised concerns that the acquisition would give Comcast too much cable TV and broadband market power. Comcast is the largest broadband provider and the largest cable TV provider in the U.S.
Too much power?
“I am very concerned that Comcast could use its clout in the broadband market to dictate the content consumers receive and the prices they pay, and these concerns are only intensified by Comcast’s proposal to acquire Time Warner Cable,” Franken wrote in a letter to the U.S. Department of Justice last month.
Cohen disputed critics’ contention that the deal will hurt competition.
“The FCC filing lays out in considerable detail how Comcast and TWC are better together for millions of customers and businesses, describing the exciting enhanced services and other concrete consumer benefits that will be available because of the transaction,” Cohen wrote. ”Importantly, we show that these significant benefits are achieved without diminishing competition in video, broadband, phone, programming, advertising, and other markets.”
The deal will bring to Time Warner customers the net neutrality commitments that Comcast made to federal regulators as a condition of its 2011 acquisition of NBCUniversal, Cohen said. Customers in Time Warner territory will also have access to Comcast’s US$10-a-month broadband service for low-income customers, he added.
The deal does not reduce competition because Comcast’s and Time Warner’s coverage areas don’t overlap, Cohen said.
“It’s understandable why any large merger will attract questions about competition and consolidation,” he wrote. ”But this particular transaction actually raises few competition concerns. Comcast and TWC do not compete against each other in any area, so there is no reduction in consumer choice in any market. Customers will still have the same number of video, broadband, or phone options before the deal as after it.”
Critics question the deal’s long-term effects on the broadband and cable TV markets. Franken, a member of the Senate Judiciary Committee, said the merged company will have significant influence on the Internet.
“Simply put, the Internet belongs to the people, not to huge corporations,” he wrote in his letter to the DOJ. “Comcast’s proposed acquisition of Time Warner Cable could disrupt this balance of power, resulting in higher costs and fewer choices for consumers.”