Comcast-TWC merger would create a ‘fearsome Goliath,’ should be shot down

Why Comcast Time Warner Merger Is Bad

No one can exactly accuse the editors of The Economist of being wild-eyed populists or enemies of capitalism, which is why it’s noteworthy that the magazine has taken a pretty strong stance against the proposed merger of Comcast and Time Warner Cable. In a leading editorial arguing against the merger, The Economist says that combining the two companies would create “a Goliath far more fearsome than the latest ride at the Universal Studios theme park” that would have entirely too much control over broadband infrastructure in the United States.

“If the takeover is approved, Comcast would control 20 of the top 25 cable markets, according to MoffettNathanson, a research firm,” The Economist writes. “Antitrust officials will need to consider Comcast’s status as a monopsony (a buyer with disproportionate power), when it comes to negotiations with programmers, whose channels it pays to carry. Comcast could refuse to carry certain channels, or use its clout to insist on even greater price discounts or to favor its own content over that of others.”

The Economist goes on to write that both Comcast and Time Warner Cable are “reviled” by American consumers for both shoddy customer service and high prices and that they would only be encouraged to continue such practices if they were allowed to merge. The bottom line, says the publication, is that regulators should “reject a merger that would reduce competition, provide no benefit to consumers and sap the incentive to innovate.”

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