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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