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About The daily Astorian. (Astoria, Or.) 1961-current | View Entire Issue (April 28, 2015)
4A THE DAILY ASTORIAN • TUESDAY, APRIL 28, 2015 Winners, losers of the demise of the big Comcast deal NEW YORK (AP) — In the aftermath of Comcast’s decision to walk away from buying Time Warner Cable, some winners and losers are emerging. The combined company would have created an Inter- net and TV behemoth with unprecedented power over what Americans download and watch. It would have served nearly 30 percent of video subscribers and 55 per- cent of the country’s broad- band homes. It also would have controlled NBCUni- versal, home to NBC, cable networks including Bravo DQG ¿OP VWXGLR 8QLYHUVDO Pictures. But consumer advocates and Internet activists had railed against the deal from the start, saying it would limit consumer choices and lead to higher prices. And ultimately the planned merg- er fell apart after regulators decided it would be bad for consumers. The breakdown of the deal is being seen as a blow to Comcast and the cable in- dustry in general. Converse- ly, it’s being hailed as a vic- tory for consumer advocates and the competitors of the two companies. WINNERS Online video providers A major worry for regula- tors was that a bigger Com- cast would be able to choke the online video industry. Why? Comcast has its cable business to protect and could also create online-only TV service of its own. Dish, the satellite TV company that recently intro- duced a Web TV program called Sling TV, was one of the backers of a group called Stop Mega Comcast that advocated against the merg- HU ZLWK UHJXODWRUV 1HWÀL[ which had faced off with Comcast over having to pay it network-connection fees to ensure that its content would stream more smoothly to Comcast subscribers, also opposed the deal. Consumer advocates This is the second big bat- tle consumer advocates have won this year. They pushed the FCC to enact Net Neu- trality rules that would keep broadband providers from blocking, slowing or making special “fast lanes” for con- tent. They also railed against the power over the Inter- net and TV that a combined Comcast and Time Warner Cable would have. By crit- icizing the deal and getting negative stories about Com- cast to the media and Capitol Hill, “we were able to pro- vide enough cover” for reg- ulators to challenge the deal, said Matt Wood of Internet and media advocacy group Free Press. Media companies The combined company would have had more power to negotiate lower prices for TV and movies that are piped into subscribers’ homes from FRPSDQLHV OLNH )R[ 'LVQH\ and Viacom. It also could have used its increased mus- cle to favor its own NBCU- niversal programming over content from those compa- nies. The competition Some had thought that AT&T’s $48.5 billion pur- chase of DirecTV, announced a few months after Comcast’s deal, would help regulators approve both transactions because the two giants would balance each other out. The Comcast deal is dead, EXW DQDO\VWV VWLOO H[SHFW WKH AT&T deal to go through. AT&T says it will close by the end of June. The com- bined company would have more subscribers than Com- cast — 26 million video sub- scribers— but fewer Internet customers at 16 million. LOSERS Comcast The company spent more than a year working on this $45 billion transaction, which would have added mil- lions to its subscriber rolls, broadened the reach of its X1 video operating system, giv- HQKHIWWRLWVSUR¿WDEOHEXVL- ness-services division and helped it cut costs. The deal is also another big failed deal attempt for Comcast CEO Brian Roberts, who is used to winning. Disney rejected his $54 billion hostile offer in 2004. involved in the ISP business than ever before,” wrote BTIG analyst Rich Green- ¿HOGLQDEORJSRVW$QGWKDW could hurt companies’ stock prices. On the other hand, the increased scrutiny could be good for customers: “In- The cable industry creased regulatory scrutiny as a whole could prompt cable compa- ([SHUWV LQ WKH LQGXVWU\ nies to raise broadband pric- say the breakdown of this es less aggressively in the fu- deal is further evidence that ture for fear of drawing even the government is scrutiniz- more attention,” said Andy ing Internet service providers +DUJUHDYHV RI 3DFL¿F &UHVW more. Cable companies are Securities in a note. the dominant providers of UNCLEAR wired Internet access in the Time Warner and U.S. Charter Communications “It is quite evident that Charter Communications. regulators will be far more Charter, another big cable company, wanted to buy Time Warner Cable for $38 billion, but Time Warner Ca- ble chose Comcast. So Char- ter bid $10.4 billion for cable operator Bright House. It was also gaining some subscrib- ers in a side transaction to the Comcast deal. Both those deals required that Comcast buy Time Warner Cable. So those fell apart. 1RZ PDQ\ H[SHFW &KDU- ter to try to buy Time War- ner Cable again, at a similar price as before or a higher price. It could also make another arrangement with Bright House. Or both. But Time Warner Cable could also try to buy Bright House. AP Photo/Gene J. Puskar, File The Comcast logo appears on one of the company’s ve- hicles, in Pittsburgh. The planned merger of Comcast and Time Warner Cable fell apart after regulators decided it would be bad for consumers.