Comcast Can Blame Us All for Sinking Its Time Warner Deal

Skip to story Comcast CEO Brian Roberts speaks at a news conference in Washington D.C., June 11 2013. Andrew Harrer/Bloomberg/Getty Images

Comcast officially abandoned its plans to acquire Time Warner Cable earlier today. But the nation’s largest cable provider didn’t simply decide it wasn’t interested in the $45.2 billion dollar deal any longer. Signals from the Department Justice and the Federal Communications Commission made clear that the merger wouldn’t be approved, and Comcast decided to cut its losses.

Some claim the move is a victory for the Obama Administration, which has long promised to crack down on antitrust violations and mega-mergers. But in 2011, the FCC and the DOJ approved the merger of Comcast and NBC Universal, another coming together of two massive media companies that raised serious questions about conflicts of interest.

Does that mean federal regulators have toughened up since then? Maybe, maybe not. But one thing is for certain: the rest of us have. The world is paying attention to internet policy in a way that it never has before. And with that attention comes pressure that will force the government’s hand on everything from network neutrality to antitrust as the internet becomes increasingly central to the lives of everyone.

A Different Perspective

One of the most obvious changes to the political landscape since the Comcast-NBC deal is the appointment of former telco lobbyist Tom Wheeler as FCC chairman in 2013. The previous chairman, Meredith Attwell Baker, left the agency in 2011 to take a job with Comcast about two months after her approval of the NBC merger.

Wheeler has brought a very different perspective to the FCC, says Randolph May, president of the Free State Foundation, a think tank that has generally been skeptical of government regulation.

“I think the current FCC has a way of looking at things that is more suspicious of the internet service providers than I think is warranted,” he says, pointing to the rise of wireless internet services and high-speed fiber networks as potential competitors to established cable and DSL providers. He also says the growing power and wealth of content providers such as Facebook, Google and Netflix could have served as checks on the power of a combined Comcast and Time Warner Cable.

May thinks that suspicion of ISPs has played out in other recent decisions as well. For example, the agency recently redefined broadband as 25 megabits per second, up from just four megabits per second. “By doing that they magically, or ipso facto, increased the ‘broadband’ marketshare of Comcast and Time Warner Cable substantially,” he says.

Only Itself to Blame

But the appointment of Wheeler as FCC chairman can’t be the full explanation for the government’s shifting stance on mega-mergers. After all, the DOJ also approved the NBC deal. John Bergmayer of Public Knowledge, an advocacy group that promotes network neutrality and broadband access, points out that most of the staff of the two agencies has actually stayed the same over the past few years. “The FCC and DOJ staff don’t turn over as quickly as you might think,” he says.

Bergmayer says the way Comcast handled itself following the NBC deal doomed its effort to get another major acquisition approved. The FCC and the DOJ imposed a number of conditions on Comcast in effort to prevent the NBC Universal merger from harming consumers. But, he says, Comcast didn’t always follow the rules.

For example, in 2012 the FCC fined Comcast for not honoring its agreement to provide stand-alone broadband after the merger. In 2013, the agency issued another fine, saying Comcast violated “neighborhooding” agreements by failing to group together competing channels — for example, Bloomberg and MSNBC — on television dials.

Bergmayer also says that although Comcast agreed to honor the principles of network neutrality as part of the deal, the company has imposed bandwidth caps that its own services were able to bypass in what amounted to less-than-neutral discrimination against other content providers.

Even when Comcast did follow the rules of the agreement, Bergmayer says, those rules didn’t always have the results that regulators expected. “Being litigious, always looking for loop holes, and the conditions not really having the pro-competitve effect intended all reduced the appetite among policy makers to negotiate with Comcast this time around,” Bergmayer says.

The Price of Freedom

But in a way, seeking to give credit or cast blame is beside the point. The one overwhelming difference between today and 2011 is the dramatically heightened interest in the policies and companies that impact our access to the internet. Net neutrality went from esoteric geek issue to John Oliver rallying cry. And while everyone was watching, Comcast couldn’t seem to avoid acting like a mustache-twirling villain over and over again.

There was Comcast’s perpetual low rankings in customer satisfaction. There were the news reports of company reps changing customer names to “asshole brown” and “superbitch”. Then there were the apparently ghostwritten letters of support for the Time Warner merger.

At the same time, the public has become more sophisticated about internet policy debates in general.
Bergmayer credits that interest to this year’s campaign to protect network neutrality by reclassifying broadband providers as public utilities. The surge in public engagement might go back even further to the widespread campaigns against the SOPA and PIPA bills that would have required broadband providers to block access to content deemed to infringe copyrights. Regardless of what has spurred this heightened attention, the public is paying closer attention to how the government regulates the internet, and that scrutiny is clearly influencing decision-making.

And that need for public vigilance hardly comes to an end now that the Comcast-Time Warner deal is off. Charter Communications is already eying Time Warner Cable for itself, and thanks to Comcast, it now has a playbook for what not to do. Google, meanwhile, could emerge as a major player in both content and broadband access thanks to Google Fiber. As we all become more dependent on the internet, the companies that provide access to it become more powerful. The best way to keep that power in check is to keep paying attention.