Comcast’s Deal with Charter Is Putting Lipstick on a Pig

By Michael McCauley on Tuesday, April 29th, 2014

Comcast announced earlier this week that it was selling off about three million customers to Charter Communications in an attempt to make its proposed merger with Time Warner Cable more palatable to regulators.  But this latest deal does little to address our concerns about the mega merger.

Comcast has been saying all along that it planned on reducing its total number of cable subscribers after it merged with Time Warner.  Together, the merged companies would have about 33 million subscribers.  Comcast’s deal with Charter takes that down to around 30 million.  Nonetheless, Comcast would still control over two-thirds of the cable TV market and nearly 40 percent of the broadband Internet market.

In announcing the deal, Charter and Comcast claimed that it would benefit consumers by fostering greater competition.    However, these companies are simply carving up the marketplace to give themselves greater regional power.   How does that help consumers?  A case in point is Los Angeles, which is currently served by Time Warner and Charter.  Under the deal announced yesterday, Comcast will get Charter’s customers allowing it to dominate the L.A. market once it merges with Time Warner.

The Comcast deal with Charter represents a major about-face for Charter, which up until recently was opposing Comcast’s merger with Time Warner.  In a proxy filing with the Securities and Exchange Commission in March to Time Warner Cable investors, Charter warned, “From the regulatory perspective, it is difficult to imagine a transaction that could concentrate the industry more than the proposed Comcast merger.”

We agree.  Consumers stand to lose big if the merger is approved and Comcast is allowed to control such a huge share of the cable TV and broadband markets.  Comcast’s massive new size would give it enormous power over what we see, how fast wee se it, and how much we pay.  This deal with Charter does nothing to change that.

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