Time Warner Deal Is How Comcast Will Fight Cord Cutters 424
An anonymous reader writes "This NY Times articles makes the case that Comcast's planned acquisition of Time Warner Cable is part of a strategy to fight back against the millions of people ditching cable subscriptions. 'The acquisition rests on the assumption that as people cut back on their monthly TV plans, the cable lines coming into their homes won't lose their value.' The idea is that switching away from cable TV will simply make consumers more beholden to their internet connections, and removing (i.e. acquiring) the competition will let Comcast raise rates without losing customers. The article concludes, 'The steady price increases in broadband rates cast a pall over any cord cutter's dreams. It's possible that you might still save money now by cutting off your cable. But if you plan to watch a lot of TV over the Internet, don't expect to save money forever.'"
I've done my part (Score:5, Informative)
Now, we are not as a community beholden to Time-Warner, but can switch to Verizon as a provider of all things digital (internet, TV, and phone).
Both are desperate to sell you "packages" of services, rather than just internet. Screw them. I call once a year and threaten to ditch them for their competitor. The result is a rate reduced by about 40%.
I do not own a television, nor do I use a land-line phone. I just want internet. Well, that sort of logic falls short with their telephone salespeople. The only threat that works is, "I will totally cancel service from you and will go to your competitor."
Say what?? (Score:4, Informative)
If Comcast is paying $1B to cover a region, and another $100M a year to maintain it, it'll pay that regardless of whether it keeps or loses 50% of its customers. And likewise a competitor will pay exactly the same.
The cost structure you assume is exactly the opposite of what actually happened when phone service was deregulated to allow competition. http://en.wikipedia.org/wiki/Competitive_local_exchange_carrier [wikipedia.org] Costs to maintain the shared wiring infrastructure were split amongst each operator (ILEC, CLEC) rather than multiplied by each additional operator as you suggest.
The "orderly transition" (Score:5, Informative)
So, I attended the Streaming Media West [streamingmedia.com] conference last month, and one of the things I came away with was how the existing players (Hollywood, cable companies, etc.) are adamant about ensuring an "orderly transition to IP-based delivery." That is an exact quote from one of the over-the-top (OTT) sessions I went to, where over-the-top refers to content delivered over IP directly to the user from someone other than the broadband provider (e.g., watching a movie from Netflix instead of from your cable company's video-on-demand service).
This is very much the point of the "TV Everywhere" systems by which you login with your cable or satellite credentials in order to watch cable/satellite content on a mobile device or set-top box (iPad, Roku, etc.). It's basically a rear-guard action against the cord-cutters: we'll let you watch the same content on any device, provided you pay the same price for it. Keep paying your cable bill, even if you don't watch cable.
I wrote a long blog about the show here [subfurther.com]. But taking it back to the Comcast / Time Warner deal, the competitive issue is not in individual markets (where, indeed, there's usually only one cable company), but in the power of a combined Comcast / Time Warner to keep creatives in the old system, by using caps, throttling, predatory pricing, and other dirty tricks to hamper genuine Internet TV.
Presumably, once the Justice Department comes to understand the antitrust implications of this deal, they'll immediately launch an investigation. Of Apple.