Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Sounds Scary Because It Is Comcast's Time Warner Buyout Is Bad for America

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Sounds Scary Because It Is Comcast's Time Warner Buyout Is Bad for America

Article excerpt

David Cohen, Comcast Corp.'s executive vice president and the mastermind behind its deal to buy Time Warner Cable Inc., sounded pugnacious and confident on a recent conference call with investors. Regulatory and antitrust approval of the deal, he says, will happen within the next nine to 12 months. But even Mr. Cohen had to acknowledge that the public might be worried about the power of this combination. "It may sound scary," he said.

Indeed it does. Although Comcast's management points out that when they're finished - and after they divest some of their systems to others - the combined company will have just 30 percent of the national share of pay-television subscribers. Nationwide share means little to people and businesses, which often have little choice when it comes to cable: Ninety-one percent of Americans who subscribe to data services also buy video services, so the relevant market for them is the bundle. When it comes to bundles, satellite companies Dish Network Corp. and DIRECTV can't offer the data capacity that Comcast can; their communications have to travel more than 22,000 miles one way.

The reason this deal is scary is that for the vast majority of businesses in 19 of the 20 largest metropolitan areas in the country, their only choice for a high-capacity wired connection will be Comcast.

Comcast, in turn, has its own built-in conflicts of interest: It will be serving the interests of its shareholders by keeping investments in its network as low as possible - in particular, making no move to provide the world-class fiber-optic connections that are now standard and cheap in other countries - and extracting as much rent as it can, in all kinds of ways. Comcast, for purposes of today's public, is calling itself a "cable company." It no longer is. Comcast sells infrastructure subject to neither competition nor a cop on the beat.

For a country attempting to compete on the global stage, this is a problem. …

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