Comcast thinks very, very poorly of our intelligence. That’s the only conclusion I can come to after reading up on the company’s testimony in the Senate on Wednesday in which it hilariously tried to convince us that it’s really a tiny little underdog in the content distribution world that needs to merge with Time Warner Cable so it can stand up to the big bullies at Google, Amazon, Apple and Microsoft. To illustrate this point, as LA Times columnist Michael Hiltzik points out, the company passed around a ridiculous chart showing how small its market cap is compared to its “competitors.”
What’s more, Comcast exec David Cohen said that all of these “rivals” already have a massive advantage over his poor beleaguered company because “the difference between all those competitors and us is they have global and national scale.”
Raise your hand if you have the option of getting home Internet service from Apple, Google, Microsoft, Facebook or Amazon. In fact, the only one of those five companies I just mentioned that actually does offer home Internet service is Google and that service has only been announced for three different markets so far.
As for Verizon and AT&T, most of what they offer as far as Internet service comes in the wireless realm, where they impose strict data caps and slap consumers with hefty fees for going over them, thus making it basically impossible for us to rely on wireless as our main source of home Internet connection. Sure, they also offer services such as FiOS and U-Verse but those are only in a limited number of markets and Verizon has said that it has no further plans to expand FiOS in the future.
So really, when we talk about the market for home broadband services that are in a significant number of areas, the two biggest players are really… Comcast and Time Warner Cable! But don’t worry, says Comcast, there won’t be any reduced competition when these two companies merge because neither of them have ever bothered trying to compete with one another in the first place.
So what’s the argument in favor of giving these two companies what they want even as they admit that they deliver terrible customer service and they admit that they’re going to keep jacking up our prices after they merge?
As The Washington Post tells it, Comcast is saying that letting it merge with Time Warner Cable will give it even more incentive to aggressively invest in boosting its network speeds and performance than it would otherwise have by itself. Among other things, Comcast on Wednesday crowed about the fact that it’s boosted its mid-tier Xfinity plan all the way up to 105Mbps and it’s promising that we’ll see more such speed boosts in the future if it can combine its powers with those of TWC.
Of course, there’s an even better way to give Comcast an incentive to improve its network and it’s called actual free-market competition. In Austin, Tex, which just happens to be one of the three markets where Google has officially announced Fiber deployment plans, both AT&T and Time Warner Cable have been stumbling all over themselves trying to boost their Internet service offerings up to 300Mbps and have announced plans to offer 1Gbps service in the future as well. Google Fiber, even though it’s only launched in just a few markets, has done a lot more to get rival ISPs to really invest in boosting performance than Comcast has ever done.
If the United States government wants to involve itself in improving the state of broadband in this country, then it should concentrate on figuring out ways to spur more competition to light a fire under the incumbent cable companies. Letting Comcast and TWC merge will do absolutely nothing to further that goal and, if anything, will make it even harder to achieve.