Why does Charlie want the FCC to block Comcast-TWC merger?

DISH Network Petitions FCC to Deny Comcast Time Warner Merger
Monday, August 25, 2014 4:58 pm MDT

ENGLEWOOD, Colo.--(BUSINESS WIRE)--Citing irreparable harm to competition and consumers, DISH Network Corp. (NASDAQ: DISH) petitioned the Federal Communications Commission (FCC) to deny the merger of Comcast Corp. and Time Warner Cable, Inc. The petition to deny, available here, outlines, among other things, the critical role high-speed broadband plays in the video industry and the potential for the merger to significantly damage competitive development of over-the-top (OTT) video and limit consumer access to online video programming. Some key points from the petition on the following topics include:

(See the full press release for more information ...)
http://about.dish.com/press-release/corporate/dish-network-petitions-fcc-deny-comcast-time-warner-merger

 

Same reason why the cable companies blocked the Dish/DirecTV merger several years ago... and I agree, no way this merger would result in lower prices for anyone. It might not mean immediate higher prices, but no way it means lower prices.

 

That's the thing about some of these mergers... they don't have to mean the end of TV as we know it and doom & gloom... but they aren't likely to mean prices go down for anyone.

In theory, a Dish/DirecTV merger would have been good because it would help (eventually) their bandwidth issues without having to launch new satellites into space... but it likely wouldn't have affected pricing unless the merged company adopted whichever company had the lower prices at that moment.

Most of these cable company mergers are going to merge companies in different non-overlapping territories... so there is likely little gain for people in any given market. The only gain would be to whomever runs the newly merged company in terms of negotiating power with networks... but unlikely they "pass the savings" onto their customers who have no increased choice than they had previously.

The downside to Dish/DirecTV merging is reduced choice since both companies cover nationwide and thus compete with each other and cable in those markets... so combined Dish/DirecTV reduces consumer choice more than merged cable companies would.

Short version... merged cable doesn't seem to benefit consumers, merged satellite might... merged cable doesn't reduce consumer choices, but merged satellite definitely does.

 

AT&T purchasing DirecTV pretty much ends the idea of a DISH/DirecTV merger (unless AT&T sells DirecTV to DISH in a few years). But I do not see benefits to consumers in merging the two surviving satellite companies. There is definitely a benefit for the companies ... which is why both Ergen and White thought it was a good idea ... but setting up a company with virtually no competition in rural areas of the country would lead to the combined company picking the higher of the two pre-merger price lists - not the lower.

Cable is losing customers not only to satellite but to other services that spread best where cable serves - wired and urban America. People can buy their connectivity from cable or another provider and then buy whatever content they can separate from their connectivity. Or they can go with a competitive bundled provider such as a fios provider.

Perhaps if competition works it's way out from the urban and suburban areas into rural and unpopulated America there will be effective enough competition for DirecTV and DISH that they will need to "merge to survive". It would be better to have one strong satellite carrier than two failing ones. But we're a long way away from either satellite carrier failing. The boom days are gone ... but they are holding their own.

Comcast is a huge merger that gives them a large footprint and more pull with the program providers. They recognize that they will be too big and as part of the merger are spinning of parts of their system to Charter ... as well as a separately owned Charter controlled subsidiary. It is almost like Comcast is agreeing with Mr Ergen and the others who say a combined Comcast will be too big ... and are self limiting the size of their new company in hopes that they can still get approval to merge.

I do not see a problem as long as the cable channels and other content Comcast controls remains available at a reasonable price to other providers. But that is a big worry. DirecTV and DISH could see higher prices asked for Comcast controlled content.

Anyways ... there is no way that any merger will lower prices for consumers.