Polka to Hill: Comcast/TWC Deal Threatens Consumers, Competition

American Cable Association president Matthew Polka plans to tell the House Judiciary Committee Thursday that Comcast's proposed $69 billion merger with Time Warner Cable, and its proposed system spin-off/trade with Charter, will result in a multitude of anticompetitive harms and needs a bunch of fixes if it is to be approved.

Polka is among the witnesses at an oversight hearing on the deal Thursday.

"To put it mildly, the Comcast-TWC transaction is a 'big deal' that threatens consumers and competition, likely resulting in higher prices for consumers," he says, according to his prepared testimony. "As I will discuss, there is more than sufficient evidence already to demonstrate that the proposed transaction will result in significant anticompetitive harms in many ways."

ACA is concerned about Comcast as both an MVPD—the nation's largest—and as a programmer with regional sports nets (RSNs), cable nets—USA, Golf, Syfy, Bravo, E!, MSNBC—as well as TWC as a cable operator with RSNs.

It argues that gives the deal both vertical and horizontal elements and creates potential harms from the combination of the two company's programming assets; from the combination of Comcast's programming assets with distribution assets from TWC and Charter; and from the combination of Comcast's distribution assets with those of TWC and Charter.

Comcast's side deal with Charter will be a net loss of 3.9 million subs, but Comcast will pick up some former Charter systems in the deal that will result in some geographic clustering.

As to remedies, Polka says arbitration for a start, but that will not be enough and is too expensive for some smaller operators, like the ones he represents. Polka does not offer up what those other conditions would be, though he says ACA would be happy to help come up with some. But he does suggest there are sufficiently robust conditions to allow the merger to proceed.

"If the FCC and DOJ ignore or treat lightly the potential harms or provide inadequate relief, the likelihood of more big content and distribution mergers will surely increase, all riding on the precedent of this deal," he says. "As a result, consumer hopes for lower prices, greater choice, and more competition will be dashed. On the other hand, if the federal agencies address the likely harms with robust relief, existing providers will reinvest in their businesses and new entrepreneurs will rush into the market – all to the benefit of American consumers."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.