EXCLUSIVE: The Writers Guild of America has offered a chilling picture of the future of television to the Federal Communications Commission in a bid to block the proposed Comcast-Time Warner Cable merger.
In February, Comcast agreed to buy Time Warner Cable for $45 billion in a deal that would combine the two largest cable companies in the United States. The deal must still be approved by the FCC.
“The FCC should deny the proposed merger,” the WGA said in a brief filed with the FCC on Friday, noting that the merged entity “would control almost 30%” of the cable and satellite TV market.
Such a merger, the guild argued, “would give too much power over broadcast and cable networks. Comcast’s ability to blackout one-third of television viewers would force networks to agree to terms and rates set by Comcast, harming investment in programming.”
A merged Comcast-Time Warner would also control approximately 30% of the broadband Internet market, the guild said, “giving the company the means to limit competition from online video providers like Netflix and Amazon. Comcast has already demonstrated its inclination for anti-competitive behavior by exempting its own streaming service from data caps when watched on an Xbox, while applying data caps to competing services.”
In economic terms, the guild told the FCC that the proposed merger would create a “monopsony” – a type of monopoly in which one buyer interfaces with many sellers, and can dictate terms to its suppliers.
“Allowing the company to add eight million subscribers only increases its ability to limit competition,” the guild said, “and there are simply no conditions that can undo the harm a merged Comcast-TWC would cause.”
The WGA noted in its brief that the television industry is all ready consolidated enough, and that more mega-mergers would only harm viewers and limit their choices.
“The market for delivery of video programming remains consolidated and lacks sufficient competition at all levels,” the guild said. “This outcome is a result of deregulation and consolidation through vertical and horizontal mergers. Broadcast, cable and pay TV networks are owned by a handful of companies.
“The repeal of the Financial Interest and Syndication Rules in 1995 led to the consolidation of studios and networks. At the time of the repeal, the broadcast networks argued that increased competition from cable networks justified retiring the rules. The proliferation of cable channels, however, has not increased competition: seven companies, five of which own broadcast networks, are responsible for 95% of all television viewing in the United States. These seven companies – CBS, Disney, Discovery, NBC/Universal, 21st Century Fox, Time Warner and Viacom – create and distribute the majority of content seen on broadcast and cable.”
The WGA’s full report can be viewed at: