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Senators: Comcast deal could mean higher broadband prices

Grant Gross | April 10, 2014
The proposed US$45.2 billion acquisition of Time Warner Cable by Comcast would give the company huge market power to determine broadband prices and Internet content, a group of U.S. senators said Wednesday.

"It will not just own those [broadband] pipes, it will also own a bunch of content," Franken said. "Does that give Comcast both the power and the incentive to manipulate Internet traffic in its favor?"

Many U.S. residents still have few choices for broadband providers, and "one of them is Comcast combining with Time Warner," said Gene Kimmelman, president and CEO of Public Knowledge. With fewer broadband providers, there may be a push to add data caps on competing Web content, he said.

Comcast's NBC ownership is a "complicating factor" in the proposal to acquire Time Warner Cable, added Senator Mike Lee, a Utah Republican.

Franken noted that Comcast is a frequent target of customer service complaints, while cable TV prices have risen steadily. "I believe this deal will result in fewer choices, higher prices and even worse service for my constituents," he said. "My concern is that as Comcast continues to get even bigger, it will have more power to exercise that leverage to squeeze consumers."

Some Republican members of the committee defended the deal, saying it doesn't appear to trigger antitrust concerns. The government agencies should stay out of mergers, "absent clear evidence of market failure," said Senator Orrin Hatch, a Utah Republican. "Consumers benefit when the government allows the free market to allocate resources in the most efficient manner possible."

The broadband and cable TV markets are moving quickly with many "new entrants and evolving technologies," Hatch added.

 

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