A coalition of lawmakers in the Senate have penned a letter to the Chairman of the Federal Communication Commission and the Attorney General, urging the Obama administration to scuttle a deal that would lead to high market concentration in the telecoms industry.
As representatives of Comcast and Time Warner Cable prepared to meet with the Department of Justice on Wednesday to discuss concerns related to the proposed merger between the two companies, liberal senators urged federal regulators to block the deal.
“We believe that Comcast-TWC’s unmatched power in the telecommunications industry would lead to higher prices, fewer choices, and poorer quality services for Americans,” they wrote.
“We urge you to defend American competition and innovation and…take a stand for US consumers and businesses and reject Comcast’s proposed acquisition of TWC,” the lawmakers added.
The letter was signed by Sens. Ed Markey (D-Mass.), Al Franken (D-Minn.), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Elizabeth Warren (D-Mass.), and Bernie Sanders (I-Vt.).
It’s ultimately up to the FCC and the DOJ to sign off on the $45 billion merger. If successful, it would result in a single company controlling 57% of the broadband market and 30% of the cable market.
The senators warned that the deal could have an adverse impact on upstart video streaming services, which are increasingly replacing pre-packaged cable offerings—a transition known as “cord cutting.”
“With Comcast’s ownership of NBCUniversal and the numerous popular TV networks it controls, the combined company would have incentives and means by which to extract higher prices from other multichannel video programming distributors,” they wrote.
Some of their concerns related to paid prioritization were alleviated earlier this year by the FCC, when it approved of stronger “Net Neutrality” rules. However, the senators warned that the merger could lead Comcast to “prioritize its own programming over that of competitors.”
Bloomberg reported last week that staff attorneys with the Department of Justice’s Antitrust Division are likely to recommend blocking the merger. Meanwhile, the FCC, according to the Wall Street Journal, could be planning on referring approval of the deal to an administrative judge—a move that, people familiar with the process say, would amount to killing the acquisition.
The FCC’s own market data proves right many of the concerns already issued by opponents of the merger. Last December, the commission released a report showing that consumers in competitive media markets paid less, had a smaller rate of increase in their bills, and received more channels in their cable TV packages versus consumers who lived in markets with only one provider.
