Comcast and Time Warner Cable deal complicates TV landscape

November 24, 2013

Reports concerning Comcast’s interest in buying Time Warner Cable illustrate both the complexities of the and possible changes in media regulation laws.

In a CNBC report last Friday, anonymous sources said Comcast is looking into regulatory problems it might face if the company made a bid for TWC.

In a wonderful example of the stock exchange’s fickle nature, shares in TWC went up 10 per cent in the face of rumours concerning the merger.

The deal is controversial because while it would help the cable companies protect themselves in carriage negotiations with content-providers, media companies would presumably argue these negotiations are necessary to stop the distributers creating a monopoly.

The news is obviously welcomed by TWC, which demonstrates a drop in TV subscribers in its third-quarter earnings report and is apparently losing broadband Internet service customers.

According to Digital Trends, Comcast is also in talks with Charter “to strategize about a possible joint acquisition of Time Warner, doling out the pieces between the two to bolster each company’s coverage and subscriber bases”.

The article details how the joint-purchase offers something a loophole to the Justice Department and FCC’s anti-trust regulations, and how the partnership would help Charter, a $28 billion company, “take on less financial risk in raising the estimated $61 billion needed to acquire TWC”.

But the merger would effectively limit the availability of cable providers and come as a loss to viewers; the lack of competition in an already-limited field would presumably further increase prices.

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