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Merger could Direct-ly break a lot of DISHes

New Hampshire Union Leader

March 08. 2014 1:06AM

Cable TV alternatives like DISH or DirecTV are likely to be the biggest losers if the merger between Comcast and Time Warner Cable is approved by federal regulators.

The combined Comcast and Time Warner Cable organization will be able to make competitive offers to consumers, while pressuring content providers to keep their content off satellite systems if they want to be on the Comcast cable system.

Consumers are already finding ways to work around cable or satellite by combining low-cost, antenna-based services like Aereo (now available in Southern New Hampshire), with Internet via data plans on cell phones, and a subscription to a streaming video service like Netflix or Hulu.

Someone willing to forgo basic cable channels can satisfy their home entertainment and communication needs at costs well below either cable or satellite, with a good smart phone and a little computer savvy.

In a conference call with reporters after the merger agreement was announced, Comcast Executive Vice President David L. Cohen pooh-pooed the idea that the expanded Comcast would drastically change the landscape for video, Internet and telecommunication services, which is already in transition.

"Satellite and Telco competitors, as well as new entrants like Google Fiber have been taking away customers from traditional cable companies for years," he said. "Since 2005, telcos and satellite companies have gained almost 18 million customers while cable companies have lost 10 million customers."

Cohen said businesses like Google and YouTube, Amazon, Hulu, Netflix, Apple, Sony and others are entering or thinking about entering the online video business.

"So, previous antitrust concerns about further cable consolidation are truly antiquated in light of today's marketplace realities," he said, characterizing the merger as a modest expansion of (Comcast) cable customers from 22 million to 30 million, after Comcast completes some divestitures.

"I can't speak for the programmers, but for the programmers I have an opportunity to speak with, I'm going to make the argument to them, you guys can be calm," Cohen said. "This is not going to have a dramatic impact on our ability to negotiate with you. The difference between having 22 million customers and having 30 million customers, in a market that has more than a 100 million customers is simply not going to be enormous in terms of our leverage around programming."

In a recent opinion piece for Forbes, Warren Grimes, a professor at Southwestern Law School with expertise in antitrust and communications issues, said the merger is hardly a benign proposition.

"Comcast's proposed acquisition of Time Warner Cable will make a dismally performing and anti-competitive industry even worse," he wrote. "Their combined share of over 30 million households would dwarf rival cable firms and would be 50 percent larger than the largest satellite distributor (DirecTV)."

The impact on what once was a free-flowing Internet is of even greater concern, he wrote.

"Most frightening of all, with control over the Internet pipeline for 30 million households, Comcast could use discriminatory pricing and other strategic tools to stifle viewer access to video streaming provided by firms such as Netflix and Amazon Prime."

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