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Comcast merger with NBC? -- an open letter to the Federal Trade Commission

Cable giant, Comcast, has indicated interest in the past about owning a major television network.

The most recent rumors are that Comcast is interested in NBC, according to an article published on CNN.com.

I urge the Federal Trade Commission to prevent Comcast from purchasing major stake in NBC or any of the major television networks. It’s my belief that Comcast controls far too much of the cable television presentation in the US, particularly on the East Coast.

  • My wife and I got married 12 years ago, the same year that Comcast purchased our local cable company. At that time our local Cable-television service was $24 monthly, and we subscribed optionally to HBO for an additional $12 per month.

  • Over the course of that 12 years Comcast has increased prices to nearly $90 monthly, not including HBO which we have opted to stop receiving.

  • True, the total number of channels has increased, however we have chosen to reduce the number of channels we receive to save money. In fact, our $90 cable bill provides us with fewer channels total than it did 12 years ago.

  • I also understand that Comcast has introduced high definition television service, but again in the interest of savings we have not opted for this service because they charge a premium price for high-definition signals.

  • Overall Comcast has added very little value, while consistently and continually increasing prices to consumers.

  • Currently, the only reason we are using Comcast cable is because we purchased broadband Internet service. Currently DSL service is not available in our community. Comcast requires the purchase of cable television in order to receive cable-based Internet service.

  • The only competitor to Comcast in our community is satellite television. Satellite offers superior service at a substantially lower price, however satellite based broadband service is not effective for our family and our home based business.

In this example it clear that Comcast has virtually no bridle on consumer pricing. They are currently gouging consumers, particularly in communities with little or no competition.

In my opinion, Comcast is one of the least ethical companies on the planet.

  • Partially because of massive revenues from price gouging, Comcast has been able to spend substantial money lobbying organizations to adjust FCC regulation and other legislative issues that affect their profitability.

  • Comcast runs major advertising campaigns that specifically target satellite television, claiming poor dependability. In fact, during a two-year period where we subscribed to satellite television to reduce our expenses, the dependability of satellite signal far exceeded the dependability of cable signal from Comcast.

  • Comcast is the only major Internet provider of broadband service locally. Comcast has been investigated by many consumer groups for limiting the bandwidth, and has been a big advocate against open networks. Comcast has been one of the biggest proponents of pay-per-view Internet. While this has yet to come to fruition, it’s clear that Comcast does not have the best interest of consumers at heart.

Until true competition is available in the cable television market for every consumer I think that Comcast in particular, and cable companies in general should be held to a higher standard.

Comcast currently holds many consumers like myself over a barrel. They have exorbitant pricing even on basic services in markets where they have virtually no competition.

A merger of Comcast in any major television network would enable them to flex their pricing muscles even more so. Comcast has lobbied during an attempted merger with Disney (owners of ABC and ESPN) saying that it will not influence competition by using the same rates as NBC, Fox and CBS to carry their signals. The effect is simply moving money from one pocket to another.

Through its packages Comcast has already entered into competition with the largest Internet providers and telephone service providers in the country. For them to be able to control up to one third of the television production and pricing of those productions would be cataclysmic in my opinion.

For the vast majority of Americans, cable television has become a staple. It should not be priced like a luxury service. My family earns over $100,000 per year. For us it’s not a matter of being able to afford cable, it’s a matter of the value we receive for the price that we pay. Currently cable television service nationwide is overpriced, and Comcast is by far the worst offender.

A Comcast merger would also have broad reaching implications. Part of the reason why cable television service has increased substantially beyond inflation is because Comcast demonstrated pricing power to the other cable providers who have followed suit. Comcast has also demonstrated pricing leadership in telephone and Internet communications. I think it would be a substantial mistake to allow this company to jump into the relatively narrow market of television production or cellular telephone communication, for which they’ve also expressed interest.

Specifically Comcast should not be allowed to purchase Disney, Verizon, Viacom, News Corp. or General Electric’s stake in NBC. Furthermore I think significant financial relationships with Sprint, AOL or AT&T would also be detrimental.

I’m a big proponent of capitalism, however monopolies in service critical to America’s communication infrastructure are dangerous.

Thank you for your time,
Sincerely,

Jason Tweed

Comments

  1. Excellent analysis. Comcast is the sole cable provider in my area of west Michigan. Is the lack of competition an issue for local county governments, or is the monopoly practices a national issue?

    ReplyDelete
  2. Comcast is the dominant cable provider in the Eastern US. They control many of the top 40 TV markets.

    ReplyDelete

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