Comcast wants to buy Time Warner

Submitted by acohill on Thu, 02/13/2014 - 10:39

Comcast and Time Warner have agreed to merge, with Comcast buying Time Warner. Although this merger has to be approved by Federal regulators, the article suggests that since the two companies don't have overlapping territories, it may well be approved.

The merger would combine Comcast's 22 million subscribers with Time Warner's 11 million subs, and Comcast has said it would sell off 3 million subscribers to keep the new company below 30 million customers. Supposedly that is some threshold that determines if the company will have too big an influence on the market.

This smells of desperation to me. Cable TV is dead, dead, dead, with Over The Top (OTT) services like Netflix and Hulu killing off cable and satellite TV. I was in a rural community for a week recently. There were three complaints:

  • The lack of bandwidth is killing our Main Street businesses.
  • No one can work from home because the bandwidth available is too limited.
  • We are having a hard time attracting families because services like Netflix and Hulu are unusuable, and the kids are revolting.

    Aside from the fact that copper-based coaxial cable is grossly inferior to fiber, the cable companies simply can't provide business class symmetric services over their "entertainment" networks in any sort of consistent way, and they know it. So they are going to merge to give them market clout on the content side, and they are going to continue to try to buy laws at the state level, like they just tried in Kansas.

    In less than ten years, most American homes will have fiber. It is as inevitable as flush toilets, which were once considered a luxury. And when the dust settles, the communities that introduced competition by creating shared digital road systems are going to be doing much better economically.

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