Comcast continues to loudly claim that its proposed merger with Time-Warner Cable and market swap with Charter Communications would not be anti-competitive because it doesn’t compete with either company. Cable operators are geographically separated and overbuilding each other is not economically feasible, Comcast says, so mixing and merging would have no effect on competition.
That’s false, according to a motion filed with the California Public Utilities Commission by its own office of ratepayer advocates (ORA). In the process of going through millions of documents that Comcast and its cohorts have given to the CPUC and the FCC for confidential review, ORA has found, it says, three items that prove that Comcast plans to sell television service via the Internet – over the top (OTT) – that, by its very nature, is not geographically limited…
The significance of these documents cannot be underestimated as they show that competitive entry into the OTT services market can now be accomplished without overbuilding, and therefore, the economic barrier to an OTT service provider entering into an incumbent provider’s operating area, such as Comcast competing head to head against TWC and vice versa, disappears…
The bottom line is that OTT is another example of Comcast using its control of telecommunications facilities to leverage ancillary markets. This matters here because one of the California-specific effects of the merger will be Comcast’s unparalleled dominance in the last-mile control of California consumers, i.e., “eyeballs,” and in the content and OTT markets.
The actual documents are still confidential, but have been submitted under seal to the CPUC administrative law judge handling the case. Assuming, as I do, that ORA’s characterisation is more or less correct, it’s another powerful argument for denying the merger altogether, rather than loading it up with conditions that are likely to be thrown out at the federal level.
The matter is on the CPUC’s agenda for next week’s meeting, but given the furore over Comcast’s request to cut a back room deal, the distinct possibility that unenforceable conditions effectively mean unconditional approval and this latest information found by ORA, don’t be surprised if it’s bumped into April or beyond.