As Comcast Weighs Its Options, Six US Senators Urge DOJ And FCC To Block Time Warner Cable Merger

The opposition to the $45 billion Comcast-Time Warner Cable merger is growing. Late last week, we reported that the Department of Justice (DOJ) antitrust division is damn near close to recommending that the deal be nuked. The DOJ’s recommendations could ultimately lead to a lawsuit aimed at stopping the deal in its tracks.

For its part, Comcast contends that a merger with TWC would be good for consumers. “There is no basis for a lawsuit to block the transaction,” said Comcast spokeswoman Sena Fitzmaurice last week. Fitzmaurice went on to add that the deal would “result in significant consumer benefits -- faster broadband speeds, access to a superior video experience, and more competition in business services resulting in billions of dollars of cost savings.”

Comcast will sit down with officials from the DOJ Wednesday to plead its case, hoping that the mega deal doesn’t run off the tracks. But Comcast is facing an uphill battle, as Justice Department insiders have told the Wall Street Journal that the combined company would possess entirely too much power in both the broadband and television markets. If the merger were approved, the combined companies would control a whopping 57 percent of the U.S. broadband market and over 30 percent of the pay-TV market.

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Comcast CEO Brian Roberts (Source: Flickr)

On the FCC side, internal sources have indicated that the merger could be put into the hands of an administrative law judge, who would hold a hearing to discuss the merits of a Comcast-TWC tie-up. But unfortunately for Comcast — and fortunately for the rest of us — a hearing would ultimately only lead to more shed tears.

“Mergers are never put to hearing in order to approve them,” said former Republican FCC commissioner Robert McDowell. “They are designated for a hearing in order to kill them.”

And if that news wasn’t bad enough for Comcast, here’s some fresh fuel to throw on the fire that is consuming the prospects of a merger. Six U.S. senators — Al Franken (D, Minnesota), Bernard Sanders (I, Vermont), Edward Markey (D, Massachusetts), Ron Wyden (D, Oregon), Elizabeth Warren (D, Massachusetts), and Richard Blumenthal (D, Connecticut) — have written a letter voicing their opposition to the merger. The letter was addressed to FCC Chairman Tom Wheeler and outgoing Attorney General Eric Holder.

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Senator Al Franken (Source: Flickr)

Rather than beat around the bush, the senators get right to the matter at hand in the very first paragraph, stating, “We believe that Comcast-TWC's unmatched power in the telecommunications industry would lead to higher prices, fewer choices, and poorer quality services for Americans — inhibiting U.S. consumers' ability to fully benefit from modern technologies and American businesses' capacity to innovate and compete on a global scale.”

The group of senators explain that their respective constituents have made their voices heard that the merger would “harm competition across several different markets and would not serve the public interest.” Couple that with the absolutely dreadful customer service offered by both companies and their unwillingness to upgrade infrastructure (that is unless a new competitor enters the fray); it’s easy to see why Comcast is on the receiving end of so much venom.

And there’s also the issue of rising internet/cable TV costs for Americans. The six senators write that their constituents are “rightfully frustrated about their increasingly high cable and Internet bills and are concerned that the proposed acquisition will only drive those prices higher.” And given the relative dearth of competition in the marketplace (Time Warner Cable and Comcast currently do not directly with each other in any market across the U.S.), “consumers are only left with little choice but to pay the price a given provider demands and have little say over what content is made available to them.”

Consumer have every right to be concerned about rising cable costs, as even Comcast doesn’t want to indicate that the merger, which would likely mean huge cost savings on its end, would lead to lower prices. "The impact on customer bills is always hard to quantify,” said Comcast Executive VP David Cohen stated in February. “We're certainly not promising that customer bills are going to go down or even increase less rapidly. Frankly, most of the factors that go into customer bills are factors beyond our control."