Comcast Promises Faster Internet If Government OKs Deal

The cable giant makes the case for its purchase of Time Warner Cable.

National Journal
Brendan Sasso
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Brendan Sasso
April 8, 2014, 7:13 a.m.

Mil­lions of con­sumers around the coun­try will be able to stream high­er qual­ity videos and browse the Web more quickly if reg­u­lat­ors al­low Com­cast to buy Time Warner Cable, the com­pan­ies said Tues­day.

The cable pro­viders made the case for their $45.2 bil­lion mer­ger in an of­fi­cial ap­plic­a­tion to the Fed­er­al Com­mu­nic­a­tions Com­mis­sion. The Justice De­part­ment will also in­vest­ig­ate wheth­er the mer­ger of the na­tion’s top two cable com­pan­ies would vi­ol­ate fair-com­pet­i­tion laws.

In the fil­ing with the FCC, Com­cast said the ac­quis­i­tion will al­low it to up­grade Time Warner Cable’s net­work and make ad­di­tion­al in­vest­ments in its own in­fra­struc­ture. As a res­ult, many cur­rent sub­scribers of both com­pan­ies will en­joy faster In­ter­net ser­vice in the com­ing years, Com­cast prom­ised. 

The pledge is likely to go over well with the Obama ad­min­is­tra­tion, which has made en­sur­ing high-speed In­ter­net ac­cess to all Amer­ic­ans a top pri­or­ity.

Com­cast said it will in­def­in­itely ex­tend In­ter­net Es­sen­tials, its low-cost broad­band In­ter­net pro­gram for low-in­come con­sumers. It also prom­ised to ex­pand the num­ber of Wi-Fi hot spots around the coun­try avail­able to its cus­tom­ers. 

To re­ceive per­mis­sion to buy NBC-Uni­ver­sal in 2011, Com­cast prom­ised to fol­low the FCC’s net-neut­ral­ity rules un­til 2018. Be­cause a fed­er­al court struck down the rules earli­er this year, Com­cast is the only com­pany still bound to abide by the reg­u­la­tions, which re­quire In­ter­net pro­viders to treat all traffic equally. In its ap­plic­a­tion, Com­cast prom­ised to ex­tend that ob­lig­a­tion to Time Warner Cable areas.

Com­cast also em­phas­ized that its net­work does not cur­rently over­lap with Time Warner Cable in any mar­ket. As a res­ult, the mer­ger would not lim­it choices for any con­sumers, the com­pany ar­gued.

Com­cast said busi­nesses will likely en­joy lower prices if the deal is ap­proved, but the com­pany did not make any sim­il­ar prom­ise for home con­sumers.

Fifty pub­lic-in­terest groups quickly fired back with their own let­ter to FCC Chair­man Tom Wheel­er and At­tor­ney Gen­er­al Eric Hold­er, call­ing the mer­ger “un­think­able.”

Pub­lic Know­ledge, Free Press, Con­sumers Uni­on, and dozens of oth­er groups ar­gued that Com­cast has raised its ba­sic cable prices in re­cent years, while TWC has ac­tu­ally cut con­sumer costs. But the mer­ger is about more than just prices, the groups wrote — it’s about con­trol of the In­ter­net.

“The Com­cast-Time Warner Cable mer­ger would give Com­cast un­think­able gate­keep­er power over our com­mer­cial, so­cial and civic lives,” they wrote. “Every­one from the biggest busi­ness to the smal­lest star­tup, from elec­ted of­fi­cials to every­day people, would have to cross through Com­cast’s gates.”

Now that Com­cast has filed its of­fi­cial ap­plic­a­tion, the FCC will be­gin to in­vest­ig­ate wheth­er the deal is in the pub­lic’s in­terest. The Justice De­part­ment’s An­ti­trust Di­vi­sion will fo­cus on wheth­er the mer­ger would il­leg­ally lim­it com­pet­i­tion.

The Sen­ate Ju­di­ciary Com­mit­tee will ex­am­ine the deal at a hear­ing on Wed­nes­day fea­tur­ing testi­mony from Com­cast and Time Warner Cable ex­ec­ut­ives.

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