Proposed Comcast merger with Time Warner comes under fire

16th June 2014   ·   0 Comments

By Trevor W. Coleman
Contributing Writer

(Special to the NNPA from the Wave Newspapers) — Media watchdog Bryan Mercer recalls getting an uneasy feeling earlier this year when he heard that Comcast cable planned to pay $45 billion to buy Time Warner, creating a cable and internet behemoth unseen in the history of the American communications industry.

Mercer and other consumer advocates were convinced that the megamerger, if approved, would give Comcast-Time Warner a mammoth chunk of the Internet and cable TV market, allowing it to virtually shut out competitors, have unfair control over rates and service, and deliver a crushing industry blow to diversity and minority ownership.

Mercer was wary because a similar merger in 2011, a $30 billion deal between Comcast and NBC Universal, resulted in less diversity and higher cable bills, he said – despite talk of efforts to keep rates affordable, pledges about making the internet more accessible to the poor, and Comcast’s vow that the merger would produce more consumer choices, better services and more opportunities for minority broadcasters.

“Our country can’t afford another Comcast merger,” said Mercer, co-executive director of the Philadelphia-based Media Mob­iliz­ing Project, a grassroots organization that focuses on ensuring that minority and low-income communities have their voices heard in the media.

“With every one of these mergers, we’ve seen the disappearance of locally-owned media and minority voices,” he said. “And with Comcast’s merger with Time Warner Cable, there will be even less of a chance of minorities having a real voice in the media.”

Mercer is far from alone in his assessment. Critics of the proposed merger cite these concerns:

• The merger would make Comcast a media Goliath, giving it the ability to increase rates at will with few consumer options

• Media consolidation has killed Black voices in the industry, diminished minority ownership and hurt job opportunities

• The merger will hurt consumers and innovators by limiting competition

• Comcast is already too big, too powerful and provides poor service

Comcast executives say, however, that the merger would be a good thing for consumers because it would produce better choices for programming and generate greater efficiencies that will lead to improved service and lower rates.

“The benefits outweigh the risks here,” Comcast Executive Vice President David L. Cohen said in a statement. “Sometimes big is necessary and good.”

Such bold talk has sparked outrage from many consumer advocates and fear among grassroots activists such as Mercer. Among their myriad concerns includes this fact: Comcast and Time Warner Cable consistently rank at the bottom of customer satisfaction surveys.

“Both Comcast and Time Warner Cable routinely ranked the worst in providing consumer services year after year,” said Timothy Karr, senior director of strategy for Free Press, a nonprofit public advocate on media issues. “So merging two bad companies benefits consumers? That is something I find hard to believe.”

Karr said Comcast has raised basic cable rates in some markets by nearly 70 percent in the past four years – and its top lobbyist admitted that the price increases will continue to soar if the merger goes through.

Already the nation’s largest Internet service provider, Comcast merging with Time-Warner – the nation’s second-largest provider – would give the company 40 percent of the Internet market and 30 percent of cable TV. Critics argue that a single corporation controlling that much of the nation’s communications infrastructure is against the public interest.

James Winston, executive director of the Washington, D.C.-based National Association of Black Owned Broadcasters (NABOB), said while his group has yet to take a position on the merger, he understands the concerns. Media consolidation, he said, has had a devastating effect on the minority broadcast community.

“African-American ownership of TV stations has dropped in the past 10 years from 23 to four stations,” Winston said. “In radio stations, we have dropped from 250 to 200. Why? Because the FCC has allowed the consolidation – and consolidation started the demise of African-American ownership of TV and radio.”

Nearly all those losses can be traced to the predatory shift toward media consolidation that began when then-President Bill Clinton signed the Telecommunications Act of 1996, he said. It allowed broadcast companies to own an unlimited number of radio stations nationwide and for a greater concentration of ownership of television stations.

Comcast has been among the most aggressive players in the consolidation market, Winston said – something he said he recently experienced firsthand.

As part of the proposed merger with Time Warner, Comcast agreed to shed more than three million subscribers to avoid violating anti-trust laws and meet FCC regulations. Desperate to stop the hemorrhaging of his members, Winston approached Comcast executives this year and proposed they break up some of those subscribers into smaller packages and sell their contracts to minority broadcasters in heavily populated markets.

Since African Americans are the single-largest consumers of television entertainment, the plan could help bolster the remaining minority broadcasters’ customer base and encourage partnerships with other potential minority businesses, he reasoned.

The company refused, explaining that shedding the subscribers as a whole would provide them with a lucrative tax advantage they could not get by breaking up the list and distributing them among smaller broadcasters. In April, Comcast agreed to deliver the subscribers to Charter Communi­cations, the nation’s fourth largest cable provider — much to Winston’s dismay.

“We’re not pleased with the Charter deal, but there has to be something in here for Black businesses,” he said. “The idea is to have further conversations with them for what business ideas they are going to have for African Americans.”

This article originally published in the June 16, 2014 print edition of The Louisiana Weekly newspaper.