Paul Krugman: Comcast and Time Warner ‘Barons of Broadband’

Pic: PD

Pic: PD

Paul Krugman rightly casts a jaundiced eye at the Comcast/Time Warner merger…

Via New York Times:

Last week’s big business news was the announcement that Comcast, a gigantic provider of cable TV and high-speed Internet service, has reached a deal to acquire Time Warner Cable, which is merely huge. If regulators approve the deal, Comcast will be an overwhelmingly dominant player in the business, with around 30 million subscribers.

So let me ask two questions about the proposed deal. First, why would we even think about letting it go through? Second, when and why did we stop worrying about monopoly power?

On the first question, broadband Internet and cable TV are already highly concentrated industries, with a handful of corporations accounting for most of the customers. Once upon a time antitrust authorities, looking at this situation, would probably have been trying to cut Comcast down to size. Letting it expand would have been unthinkable.

Comcast’s chief executive says not to worry: “It will not reduce competition in any relevant market because our companies do not overlap or compete with each other. In fact, we do not operate in any of the same ZIP codes.” This is, however, transparently disingenuous. The big concern about making Comcast even bigger isn’t reduced competition for customers in local markets — for one thing, there’s hardly any effective competition at that level anyway. It is that Comcast would have even more power than it already does to dictate terms to the providers of content for its digital pipes — and that its ability to drive tough deals upstream would make it even harder for potential downstream rivals to challenge its local monopolies.

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  • Simon Valentine

    new york

    pass that there you’ve got please
    it hits good

  • BuzzCoastin

    made me think
    glad I don’t have cable

    the last time I checked
    cable was declining in usage
    and cable companies are now becoming ispz
    dinosaurs of the digital age

    • kowalityjesus

      yeah but how about net neutrality threatened, maybe ispz could become evil wielders of the faucet on precious bandwidth pipes.

      • BuzzCoastin

        commiecast already does that

        it’s a dilemma
        the very thing that has killed cable
        is the internet trojan horse
        already inside the gates

        net netrality is about allowing the commicasts
        to put a cable price structure on the internet

  • InfvoCuernos

    So they claim they aren’t a monopoly because they operate in different zip codes? The cable companies have been a bullshit Trust for so long I can’t remember when there was time of true competition anyway. Now they don’t even have to call outside the building to set prices.

  • Posthuman

    Comcast has already been a monopoly for quite a while. Unless you count Verizon Fios or the Satellite providers…

  • sdkeller72

    The FCC and SEC will allow this new monopoly and within a month the heads of both will get 7 figure a year jobs with the new conglomerate. Our regulatory agencies are joke which have been used to leverage high paying jobs in the private the sector for decades.

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