Comcast To Buy Time Warner Cable In $44.2 Billion All-Stock Deal

symbolset writes "CNBC and many others report Time Warner Cable has agreed to be acquired by Comcast for $44.2 billion. From the article: 'The agreement comes more than eight months after Charter Communictions and Liberty Media made their first foray to try and negotiate a deal to acquire Time Warner Cable (a story broken by CNBC) and follows months of conversations between Time Warner Cable and Comcast about the prospect of a Comcast acquisition of the company. '"

Comments

ogahdno

[Anonymous Coward]

/nuffsaid

Re:ogahdno

[Sponge Bath]

Finally, the great customer service of Comcast combines with the competitive pricing of Time Warner to create a single convenient entity to steer public policy with targeted campaign funding. Municipal broadband? Not on Timecast's watch.

Re:ogahdno

[Chas]

Agreed!

I love my Time Warner service. Comcast will find a way to ruin it.

At what point do we begin to want Government Interference?

Right about now actually.

There's the whole "localized monopoly" thing. But this beast is just about the sole provider for a huge swath of the US now, and people's ability to choose providers is in jeopardy.

Re:ogahdno

[Shadow99_1]

I've been all for the government to claim ownership of the physical aspect of these networks for years and then sell the physical service to ISPs for over a decade. The companies have proved time and again, regardless of massive subsidies, that they only care about milking users and not the experience of those users. Hence 1.5m/128k ADSL 'competing' with 10-25m/512k cable internet and 3G/4G capped wireless networks more recently.

At least with the government doing it we could hold someone accountable, even if the the politicians only care at election time and would likely stick the blame on someone else...

Re:ogahdno

[Anonymous Coward]

What the fuck justice department? You sue over the US Airways/American Airlines merger, but they're just gonna fucking greenlight this one? Goddamn lobbyists! Fuck you, Comcast, fuck you!

Re:ogahdno

[AJH16]

All I can say is SHIT!!! Need FiOS available to my area NOW!!!

Re:ogahdno

[jjeffries]

Hence 1.5m/128k ADSL 'competing' with 10-25m/512k cable internet and 3G/4G capped wireless networks more recently.

ADSL2+ will do near 30/3 on short loops (~1mi) and can be bonded. VSDL gets up into the hundreds of megabits. Mostly, ILECs just aren't interested/serious in competing, and would generally rather have bunches of unused, zero-revenue copper laying around than resell it to someone who *is* interested, because making no money at all is better than "helping" your competitor (who you aren't interested in competing with) by selling them something.

Re:ogahdno

[elrous0]

They'll be able to bully Netflix and Google/YouTube right out of business. With that much power, who's going to stop them? It's sure not going to be Washington (from the CNN article):

Analysts also point out that Comcast is remarkably well connected in Washington. In fact, its chief lobbyist, David Cohen, was a guest at the White House state dinner for the French president on Tuesday night.

Re:ogahdno

[tbuddy]

As good as that sounds, if the government owns the lines they'll start spying on people's communications. *ducks*

Re:ogahdno

[Creepy]

My guess is they'll be prevented from buying further media - if they were also acquiring Time Warner media, I think all hell would break loose, but the cable and media parts were split. I really dislike that Comcast is allowed to own NBC and Universal, as it creates all kinds of ground for price gouging, but the US regulators are in the pockets of the corporations, so I only suspect this will get much, much worse before it gets better.

Re:ogahdno

[Jeremiah Cornelius]

What?

Like in the "Cold War"?

Re:ogahdno

[Eravnrekaree]

Local governments should own them, cities and special purpose districts within counties so that the local population can maintain accountability and direct influence over the operations. The municipal networks done so far have been a great success. While TWC et al will say that there is no way they can offer a gigabit internet service, Municipal governments have been doing it for years, because they dont have stock dividends and millions of dollars CEO salaries, to pay.

Re:ogahdno

[krups gusto]

Shrug.  The government currently just asks comcast/verizon/twc/comcast for whatever they need anyway.  Your information is going to NSA regardless - who stores it is really a meaningless distinction.

Re:ogahdno

[AJH16]

Or the 2012 presidential election?

SEC block?

[TrekkieGod]

In terms of competition, verizon buying time-warner is a much bigger deal than the blocked attempt of at&t buying t-mobile. This purchase can't possibly be allowed to proceed.

Re:SEC block?

[TrekkieGod]

Comcast buying time-warner, I mean. Was thinking about cell phone companies and screwed up.

Re:SEC block?

[ShanghaiBill]

In terms of competition, [Comcast] buying time-warner is a much bigger deal than the blocked attempt of at&t buying t-mobile. This purchase can't possibly be allowed to proceed.

The difference is that cellular is actually competitive, so a change in the market can reduce that competition and give consumers less choice. But in cable, there is usually only one company in any area. So there is no real competition. How much does does their cable coverage overlap?

I have dealt with both companies (in different cities). On a scale of one to ten, I would give Comcast a one. I would give TWC a zero. So a Comcast takeover could be a win for consumers.

Re:SEC block?

[aerivus]

Interactive HTML5 Coverage Maps:
Comcast Coverage Map
Time Warner Cable Coverage Map
Buzzfeed has further analysis of the above maps

Re:SEC block?

[SpaceManFlip]

Wow, neither company has very good coverage on a national scale.
Also, that may be the slowest interactive map I've ever used on the Internet. Our tax dollars at work, creating sub-par web experiences every day.

Re:SEC block?

[CimmerianX]

Probably not since There will be no reduction in competition... Comcast and TW do not compete in very many areas.... thus the consolidation will (for the most part) neither increase or decrease competition. What it will do is give comcast for leverage when making deals with the content providers.

Re:SEC block?

[bigpat]

Funny, but I am guessing this will be pretty much how the Department of "Justice" determines how to rubber stamp this acquisition. They will probably just force the companies to divest in areas where they currently overlap in service.

If I were the DoJ I would force Comcast to provide net neutral service in places where there is no equivalent or better competition. And put their pricing under ongoing review and demand prior authorization of pricing changes in areas where there is no competition. Otherwise block the acquisition. This is far too critical a part of our infrastructure to allow such complete control by so few.

Re:SEC block?

[thomst]

TrekkieGod warned:

In terms of competition, verizon buying time-warner is a much bigger deal than the blocked attempt of at&t buying t-mobile. This purchase can't possibly be allowed to proceed.

I agree.

An earlier version of the NYT story quoted Comcast's CEO as stating the combined company would only control 30% of the US pay TV market - a claim which purposefully conflates cable MSOs with SATELLITE TV providers. The difference (and it is crucial) between those two delivery models is that virtually every member of Comcast's customer base, and the 8 million net subscribers they expect to acquire from TW also depend on their cable operator as their broadband ISP, whereas almost NONE of DirectTV's customers also use it for Internet service. There's an excellent reason for that: their satellite Internet service is VERY expensive, AND IT SUCKS. It's dogshit slow, monthly data transfer quotas are ludicrously tiny, it's unusably laggy for online gaming and VoIP service (plus, your uplink requires POTS), and rain- or snow-storms make it impossible to use altogether.

Still worse, Comcast has already been caught extorting money from Level 3 Communications to keep Netflix from being throttled, and it counts Netflix streams against customers' monthly data caps, but does not do the same for its own Xfinity app for the Xbox.

Nor, in all fairness, is TW anything approaching a model corporate citizen. This month TW raised my Internet access bill by $5, from $39.99 to $44.99. That's in excess of an 11% increase. Has TW's cost of providing service increased to my rural duopoloy increased by any even marginally-significant amount recently? Oh, HELL NO. That increase was shoved down my throat purely to pump up TW's stock price, SO THAT COMCAST WOULD HAVE TO PAY MORE FOR THE COMPANY. And, of course, Comcast will insist on additional ratepayer robbery to increase the stock price of the combined company, because increased, short-term shareholder return is the ONLY goal of capitalism.

Just ask any MBA.

This scumbaggery must not be allowed to spread.

Re:SEC block?

[PRMan]

That national split was forced upon TimeWarner when they bought Adelphia. They had to trade with Comcast to make the split more fair.

Antitrust lawsuit?

[randomErr]

That two biggies merging. Will they be put under the scrutiny of an antitrust investigation? That will definitely eliminate choice in several areas. What the alternative, dial up or over the air broadcast?

Re:Antitrust lawsuit?

[jonnythan]

I don't think there area any areas where both TW and Comcast operate. So it won't change the number of choices for anyone.

Re:Antitrust lawsuit?

[rudy_wayne]

I don't think there area any areas where both TW and Comcast operate. So it won't change the number of choices for anyone.

This is true.

You will just replace one shitty company with an even shittier company.

Re:Antitrust lawsuit?

[SJHillman]

Washington Post's article confirms that:

"Comcast and Time Warner Cable don’t have overlapping markets, so antitrust regulators won’t view the merger with the same concerns they did with AT&T’s proposed bid with T-Mobile, experts say. That deal, which regulators rejected, would have eliminated a major national carrier and given consumers across the country fewer options."

Link: http://www.washingtonpost.com/...

Re:Antitrust lawsuit?

[allcoolnameswheretak]

If these two cable providers don't have overlapping markets, it seems to me they were like a cartel to begin with, dividing the territory between them and entering a do-not-compete agreement, which should have already prompted an anti-trust case.

Re:Antitrust lawsuit?

[gstoddart]

As horrendous as Comcast is, they've got nothing on Time Warner.

Ah, but suck is additive ... which means you'll probably end up with an entity which sucks more than either could possibly be on their own.

Re:Antitrust lawsuit?

[coastal984]

No, it won't eliminate consumer choice because most often Cable companies have a government-authorized monopoly on a geographic area.

What this will do is create a powerhouse negotiator with the content companies as they would represent about 1/3 of all cable households. Who really hates this deal is those content companies, and the satellite companies. If allowed, Comcast will have the power to negotiate substantially lower TV subscription costs than Direct/Dish, and take money out of the content producer/broadcasters coffers.

The other side is internet... but I'm not sure that this is going to affect their DSL/FIOS competitors that much. Maybe I'm wrong on this, but I think this is likely a secondary concern that lags behind the concerns of the networks/sat providers.

Re:Antitrust lawsuit?

[MobyDisk]

You are right, but with a caveat. But the reason they don't have overlapping markets is because the local governments give exclusive cable contracts. So it isn't that the companies were forming a cartel, it is that the governments were enforcing a cartel. The companies might have actually wanted to compete, and the government was forbidding it.

Re:Antitrust lawsuit?

[Redmancometh]

areas);

Okay there man you're closing out singular parentheses AND reflexively adding semi colons after the end.

Just close out the IDE man. Its ok sometimes not coding is a good thing.

Re:Antitrust lawsuit?

[jwhitener]

Somewhat true, except those contracts are a result of physical limitations that create an almost natural monopoly. (You can't run dozens of cable lines along the poles, it would be a mess).

Now, if towns owned the cable infrastructure and other network devices involved, and just leased to Comcast / Whoever to act as an ISP, you could have competition. Remember back in the days when the internet only existed on the phone lines? Dozens of mom and pop ISPs in every town, competing on price and service, all sharing the same phone system.

Remember kids

[Dunbal]

We need to cap your internet usage and charge you usage fees as well as bandwidth fees because, oh god, it's so hard to make money in the telecommunication business we just can't seem to stop having enough money to buy each other out. By the way, we're going to increase your monthly flat rate bill a good 10% again this year because hey, those "Friends" reruns sure are getting expensive to er, broadcast.

Economies of Scale

[Anonymous Coward]

Wow! With their improved economies of scale, my rates should drop, and I should get better service than ever!

Antitrust petition

[MCSEBear]

Is there already a Whitehouse.gov petition asking Obama to oppose this? Since the cable companies seem to think they will get away with it, we need to act fast to shame Obama into stopping this.

Re:Antitrust petition

[arekin]

This isn't antitrust. Most areas restrict cable franchising so you don't have multiple providers in an area. If Comcast were to buy WOW in areas they both exist (Such as Michigan, maybe available elsewhere) it would restrict competition. Since Comcast and Time Warner don't overlap there is not antitrust issue.

Bad Service x Fewer Choices

[jasper160]

Equals a ISP landscape that will even more consumer unfriendly.

Re:Bad Service x Fewer Choices

[rudy_wayne]

Equals a ISP landscape that will even more consumer unfriendly.

This merger doesn't reduce anyone's choice because there are very few (if any) areas where you currently have the option to choose one or the other. In the vast majority of areas you have exactly one choice for cable TV. If you are lucky, you might have 2 choices for Internet -- shitty expensive cable and shitty expensive DSL.

Force the monopoly cable and telephone companies to open up their networks. Then you will have real competition which will result in real consumer choice. It will also mean the end of stupid shit like monthly bandwidth caps.

Re:Bad Service x Fewer Choices

[Jason Levine]

*raises hand*

That's my options in a nutshell. For TV, I have Time Warner Cable or I can go with satellite (and be locked into a contract). Then again, we've been on the cusp of cutting the cord for years so this might be the move that pushes us over the edge.

For Internet, however, we have Time Warner Cable. There's also Verizon DSL, but they have shown time and time again that they want to ditch it ASAP. Dial-up or no Internet isn't an option. Neither is relying solely on my cell phone for data (too expensive). So I'm essentially locked into one choice for Internet service. If they decide to charge me $100 a month for a 1Gbps connection and a 10GB cap, I have no choice but to pay. (So long as they are less expensive than cellular data plans which isn't hard to do.)

I'd love to see their networks forced open. One company should run the network and sell access to companies who then offer service to customers. This would increase competition, decrease prices, decrease network neutrality concerns (because the network company wouldn't be "competing" against NetFlix, etc), and improve service. Sadly, cable ISPs don't want this and will fight tooth and nail (and lobbyist) to prevent this from happening.

Re:Bad Service x Fewer Choices

[bigpat]

Force the monopoly cable and telephone companies to open up their networks. Then you will have real competition which will result in real consumer choice. It will also mean the end of stupid shit like monthly bandwidth caps.

Agreed. The DoJ should require that Comcast agrees to net neutrality for this to go through. But I think they also really need to divest NBC Universal and any other content business because even with net neutrality it is far too likely that they will grow their own content business at the expense of competition and at the expense of consumer choice.

Meridith Atwell Baker was Re:Antitrust lawsuit?

[GoodNewsJimDotCom]

Comcast will just bribe the FCC again

America was fun while it lasts, but if people can keep being bribed to do favors, corruption can inevitably kill a country. We have laws that you can't buy a vote. That seems noble. But the fact is that politicians can accept campaign contributions which is just a fancy word for a bribe. Who needs to buy votes when you can buy a politician?

Again, I love America, but corruption unchecked can destroy any nation no matter how strong. And with campaign contributions running rampant, the game is rigged in favor of the corrupt.

The US is screwed...

[sumdumfuk]

As if Comcast being second most hated company (EA was first) wasn't bad enough, now the giant will have almost a monopoly on cable (if it is approved). Things will NOT get better with this merger, only worse since they will have almost no competition.

increase of rates

[nurb432]

Well, they have to pay for the purchase somehow, and you cant expect them to take it out of current profits/bank accounts.

Wait ... AOL?

[gstoddart]

Surely Time Warner understands by now that getting bought in an all stock deal is a stupid friggin' idea.

Because when AOL bought them with over-inflated .com stocks, it was a terrible idea and ended up with a grossly over-valued company with few actual assets owning a company which had both revenues and assets.

I predict that in the long run this will be a terrible idea for both consumers and stockholders.

Re:Wait ... AOL?

[jafac]

It's still great as a pump-n-dump scheme for the financiers who work the deal, and a couple insider majority shareholders.

What's not to like?

Re:Could be a good thing.

[gstoddart]

One of the main factors that cause cable television bills to increase is Channel Providers raising costs on cable companies.

And, of course, there's no chance in hell that this new entity will just decide to increase rates and win on both ends.

I'm sure they'll be nothing but paragons of looking out for the consumer.

Or, they'll gouge you on both ends and chalk it up to corporate profits.

Great!

[sudon't]

Great! Now, instead of having one choice for high-speed (haha) internet, I'll only have one choice for high-speed (haha) internet.

Re:Could be a good thing.

[bigpat]

You are focusing on Comcast as a cable and Internet provider, but they themselves are content companies... Comcast owns NBC Universal and Time Warner does content also. These are vertically Integrated companies with a lot of local monopolies in the Cable and Internet businesses. If anything they will simply look to squeeze out the competition in the content areas. Already you are seeing the Cable and Satellite providers squeezing the content providers and cutting them out whenever they aren't getting a big enough cut. Look at the current situation where DirecTV has created their own "weather nation" channel instead of paying the weather channel. With more market power Comcast will be able to be more anti-competitive in content.

Bastard hellspawn of Satan and Godzilla

[gestalt_n_pepper]

I suggest reading a book in protest. Voltaire anyone?