Just Say No
This merger seems to have absolutely nothing good for anyone, except TWC and Comcast (and whoever is on the receiving end of fat brown envelopes).
The mayors of the two largest cities in America have sent letters to US watchdog the FCC expressing their concerns over the proposed merger between cable giants Comcast and Time Warner Cable (TWC). The missives outline the issues both cities have with the cable giants and the problems they hope the FCC will work to remedy …
Yes, it will create no competition at all, and wlil also remove any possibility of creating competition in the markets served by the entity resulting from the merger.
If Comcast and Time Warner are not currently competing, then the merger of these two entities would create a de-facto monopoly. It is the union of two disjunctive sets A and B: the resulting set contains all of A and all of B.
Had Comcast and Time Warner competed in some markets, the government could exclude the intersection of the two sets from the merger. Meaning they could allow the merger, but only in the areas where the two companies aren't currently competing. This would at least preserve some competition - the set resulting from this merger does not contain all of A and all of B, because the intersection of A and B has been excluded.
But, Time Warner and Comcast are currently not competing in any markets. Therefore the intersection of A and B is the null set. Therefore, it is impossible to preserve competition, because it is impossible to preserve something that doesn't exist.
Preserving competition is does not appear to be on the FCC's list of priorities.
"In Los Angeles, meanwhile, Mayor Eric Garcetti is hoping that the FCC will force Comcast to resolve a long-standing feud between TWC and local carriers regarding the Los Angeles Dodgers baseball club. After purchasing the rights to broadcast the Major League club, TWC has failed to ink deals with other local carriers, leaving many residents unable to watch their local team."
I'm against the merger and definitely against the above. TWC bought the rights, so they have the right to control how, when and where it is broadcast. This is what happens when a cable company owns distribution rights to content. If LA wanted the games to be available to all, then they should have made that part of the rights when they were sold. Since that was not part of the deal, you can't force it later. The Dodgers failed their fans when they sold the rights. The Dodgers gladly cashed the check when it came in. Maybe the Dodgers should look at giving some of it back in exchange for the broadcast to be available to others providers.
The Dodgers sold their rights for $8 billion over 25 years, and are guaranteed that money regardless of whether anyone is able to watch their games (unless TWC goes bankrupt)
The reason no one else is picking it up, is that TWC wants $4-$5 per subscriber for a channel that is Dodgers only, because they have to recover their cost. That's not for an ala carte channel where only those interested buy it, this is for a channel that they insist must be in the "extended basic" package that almost all subscribers get, so the majority of LA residents who don't care about watching Dodger games will be forced to pay for it as the providers would undoubtedly raise their rates to the cover the cost of this channel.
There are only two things the FCC can really do regarding this. They can force TWC to offer the channel on better terms (i.e. at a loss for them given the hefty payouts they're making to the Dodgers) as a condition of approving the merger, or they can force TWC and Comcast to divest all broadcast properties (including NBC and sports networks) as a condition of this merger, as I think should be required as we'll only see more stuff like this Dodgers channel fiasco in the future if they don't.
That would solve the problem as whoever bought the rights from TWC would only be willing to pay what they felt it was worth (i.e. they'd be paid to take it, due to the future $8 billion liability) so it would be a loss to TWC, but they should be OK with that if they really feel this merger is so important. Then the new owner, having been paid to accept that $8 billion liability, would be able to charge less to other providers and presumably get carriage to all/most LA residents.
If the Dodgers really cared about their fans, they'd say "let's revisit this deal at a lower price, on the condition you offer this channel at a lower price to other providers so it will be more likely to get carried". The fact they haven't shows they really care only about their bottom line, as is true for all sports franchises in the US (with the possible exception of the Green Bay Packers, being owned by thousands of individual shareholders who are fans, rather than a greedy billionaire)
...even lower on the worldwide list - and it's already way-way down...
Outside of Manhattan it is essentially a SINGLE-PROVIDER TOWN, there is no choice almost everywhere in Brooklyn, Queens and The Bronx, as well as Staten Island, thanks to the silent monopoly-agreement between Cablevision and Time Warner Cable - the two giants who do NOT enter each others' street are so arrogant that in parts of Brooklyn they serve every 2-3 blocks then let the other one take that slice of the cake, they so obviously chopped up the neighborhoods it is truly breathtaking...
...no wonder they are so arrogant: Sen "Wall St Chuck" Schumer (D-NY), living in one of these Brooklyn neighborhoods (the same one you and I live, Mr Mayor) actually sits on the "Subcommittee on Antitrust, Competition Policy and Consumer Rights" in the Senate and - icing on the cake - he is the brother of Robert Schumer, one of the the main lawyers working on the planned TWC-Comcast merger... little surprise that he praised this almost universally hated merger, right?
Let's face now that the Roman Catholic church is not such a powerful demigod the corrupt have to put their sons in another similar niche in expectation of a replacement of had anyone thought of US politicians as servants of the public?
I'm pretty sure very few British residents have considered British politicians respectable for a very long time..
“We look forward to working with the mayors of New York and Los Angeles as the regulatory review process proceeds,"
Given a suitable breathing space, we will get the mayors of two influential cities on our side; especially as their reelection times approach. We are not going to offer them pots of silly money* of course.
*And that means their lobbyists will offer them and their opponents, pots of money in a process that is transparently democratic**.
**And that means that the said lobbyists will handle said pots effectively even even-handedly but in secret.
Just a thought in closing, is it lobbyist time in any large cities' local elections by any chance?
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