New York is shaping up as a major battleground for Comcast's proposed acquisition of Time Warner Cable (TWC). While the $45.2 billion merger will be scrutinized by federal officials, it also needs approval at the state level.
TWC has 2.2 million cable TV, Internet, and phone customers in 1,150 New York communities, and hundreds of them have called on the New York Public Service Commission (PSC) to block the sale to Comcast. Comcast doesn't compete against TWC for subscribers, and its territory in New York is limited but includes a VoIP phone service offered to residential and business customers in 10 communities.
"Both Time Warner Cable and Comcast already have monopolies in each and every territory in which they do business today, and combining the companies will reinforce those individual territorial monopolies under a single corporate umbrella, with NBC-Universal thrown in to boot," resident Frank Brice argued in a comment to the PSC posted yesterday.
Brice complained that "The constant, yearly rate increases imposed on us by Time Warner Cable are and continue to be outrageous, outsized, and unwarranted. Given where I live in the mid-Hudson valley, 100 miles from New York City and 50 miles from Albany, I cannot get over-the-air TV broadcasts, and I have no choice in my cable-TV provider unless I choose a satellite provider." Brice is "so unhappy with Time Warner Cable" that he buys DSL Internet and phone service from Verizon, which hasn't built FiOS in his area.
“I am absolutely terrified by this merger”
Brice's comment is similar to many others submitted by residents to the PSC's merger proceeding.
"I, as a NYS resident, am absolutely terrified by the potential of this merger," another resident named Michael Kennedy wrote. "Time Warner has raised my rates no less than 3 times over the last 2 years with no improvement in service (to speak nothing of their deplorable customer service). This merger will destroy what little competition exists in the internet delivery service, raise everyone's bills, and in the end not benefit not one single New Yorker."
Richard Liotta, a TWC customer in Manhattan, wrote that "Comcast has already stated they will raise the prices and not only that they will impose data caps on their broadband service which will double or triple people's Internet bills."
Mayor Richard Miller of Oneonta wrote that his city is opposed to the merger. Time Warner's franchise agreement with the city expired in February 2013 yet TWC "has provided no response" to the city's attempts to negotiate a renewal, he wrote.
"Further, Time Warner's agreement with the City of Oneonta required that the City Council approve any transfer of the franchise," he wrote. "We have received no communication requesting this approval. Although we have not conducted a survey among City residents relative to satisfaction with Time Warner service, I am certain they would receive poor remarks. We oppose the proposed merger as it will further exacerbate the lack of responsiveness we are currently experiencing."
The PSC merger proceeding has attracted nearly 2,000 comments, the vast majority of which ask the commission to block the sale. Most of the opposition came within the last week and wasn't spontaneous—it was largely the result of a campaign by Consumers Union, which provided a form letter that people submitted to the PSC instead of writing their own thoughts.
But New Yorkers were speaking out against the merger more than a month before the Consumers Union campaign began. The first 170 comments on the proceeding were individually written rather than identical form letters, and the vast majority of these also opposed the merger. Since June 23, most of the comments appear to be a result of the Consumers Union campaign.
The Consumers Union form letter argues that the merger will allow Comcast to "Control two-thirds of the nation's cable subscribers, five times the subscriber base of any other cable company and 50 percent more than the largest satellite TV service; Control nearly 40 percent of the U.S. broadband market; Have enormous gatekeeper power over the content that reaches consumers; Give the company even more power to raise rates for its competitors, passing those price hikes on to customers; [and] Combine two companies that already rank near the bottom of Consumer Reports annual consumer satisfaction survey of 80,000 readers."
The merger is also an issue in the gubernatorial election, with candidate Zephyr Teachout and her running mate, Tim Wu, arguing that it should be blocked. Teachout is a Fordham law professor and Tim Wu is a Columbia Law School professor and author who coined the phrase "network neutrality."
The New York City Council also weighed in, asking the PSC to require Comcast to expand its "Internet Essentials" program that gives $10-per-month Internet access to people with low incomes.
"Only 2.6 million families of the 7.2 million families making under $35,000 in Comcast’s service area are eligible for the program, as it only applies to families with children eligible for federal free or reduced price lunch. Of that 2.6 million, a mere 300,000 families have applied," the City Council wrote. "Free or affordable access should also be provided to family and individual recipients of income-qualifying federal, state and city subsidies. Loopholes that deny 'Internet Essentials' to old customers, those who have missed bill[s] in the past, or those who have unreturned equipment must also be closed."
“No negative impact on competition because Time Warner Cable and Comcast do not compete”
Comcast did get support from a couple of business consortiums. "[T]his merger will create a world-class media and technology company that will provide superior service to customers, and continue to deliver on the requirements set forth in the city's cable franchise agreement," according to the Association for a Better New York.
The "Partnership for New York City" argued that the merger "will bring the benefits of Comcast's industry-leading technologies to millions of New Yorkers," including faster Internet speeds and Wi-Fi access.
Comcast has argued on behalf of the merger in filings and at public hearings held by the commission.
"The Commission’s approval of this transaction will provide New York residents with a more robust competitor, leading to improved services and choices," Comcast wrote in its petition requesting merger approval. "Significantly, the transaction will have no negative impact on competition because Time Warner Cable and Comcast do not today compete directly with one another… Given that Comcast has today a very limited presence in New York, the transaction will not result in the combined company holding a dominant share of the market in New York for any of these services, but will instead add a stronger, more innovative provider to the competitive mix."
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