Netflix Officially Petitions Against Comcast, TWC Merger

By now we've all heard of the upcoming merger between Comcast and Time Warner Cable. Many feel that this merger should not happen, and now Netflix has officially filed a petition to the FCC demanding that it not allow Comcast and Time Warner Cable to proceed.

If TWC and Comcast merge, it would create the largest broadband cable provider in the US, controlling about two thirds of the market. Without a doubt, the company would start to look an awful lot like a monopoly, which is against the public's interest, as a company of that size with that much power can be used to abuse its position and its subscribers.

Comcast's defense against this argument is that it doesn't compete with Time Warner Cable anyway, because they do not operate in the same service areas. Of course, that doesn't change the sentiment of a single cable provider controlling two thirds of the cable broadband in the US into a good thing.

Naturally, Netflix likely also has its own reasons for not wanting the merger to go through. In a market where the ISPs are in a position to decide which traffic gets priority network access and which doesn't, the way that a company like Netflix can survive is by having its subscribers spread out over a various number of ISPs throughout the country. Aside from strongly supporting an open Internet via net neutrality, it is therefore certainly not in Netflix's interest to have the majority of its subscribers access its services through a provider that it doesn't get along with very well.

Just a couple of days ago Netflix also agreed to pay Time Warner Cable in order to improve the service to its subscribers over the TWC network. It did the same for AT&T a while back, as well as two other large cable broadband providers.

Netflix does not want to resort to these deals if possible, but for the time being they do appear to be a necessary evil for the time being. If the FCC decides to reclassify broadband access as a telecommunications service, it will disallow ISPs to prioritize certain data packets, which in turn makes it illegal for ISPs to charge content providers like Netflix for equal access to their networks.

So in the public's best interest, there are two decisions that the FCC needs to make: stop the merger, and reclassify broadband access as a telecommunications service. What we're curious about is why it is taking so long for this conclusion to be reached if the majority of the population is wondering why any thought has to be put into this decision at all.

Follow Niels Broekhuijsen @NBroekhuijsen. Follow us @tomshardware, on Facebook and on Google+.

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  • Quote:
    Not only this merger should not happen, but major monopolistic companies should be divided.

    That makes no difference when individual baby-Bells stay within their respective territories.

    Infrastructure is a natural monopoly: any given market can only support two, maybe three economically viable providers. With each provider only raking in 33-50% of possible revenues within an area but each having to eat nearly 100% of the costs regardless of market share, having two physical infrastructures to choose from more than doubles costs.

    If you want to drastically lower costs while improving service quality, you need to aim for a fully converged utility model where all service providers go over a shared infrastructure to eliminate massive cost duplication in boilerplate access stuff. Many countries with affordable high-speed broadband use some form of co-owned infrastructure to minimize unnecessary duplication.
    13
  • These companies (esp. Comcast) are already acting as monopolies in their service areas. Even in cities that have 2 or more providers available, the territorial division reminds one of the gang-controlled streets in the past, careful not to step on other toes.
    Not only this merger should not happen, but major monopolistic companies should be divided.
    12
  • Other Comments
  • These companies (esp. Comcast) are already acting as monopolies in their service areas. Even in cities that have 2 or more providers available, the territorial division reminds one of the gang-controlled streets in the past, careful not to step on other toes.
    Not only this merger should not happen, but major monopolistic companies should be divided.
    12
  • Welcome to the Southeast. Charter or AT&T. Both have; poor customer support like every other major corporate ISP, pain in the neck throttling, and overall gimmicky marketing strategies.

    Now please pick your poison. Instead of cash or credit it's Cable or DSL and instead of paper or plastic it's now Charter or AT&T. Welcome to America everyone. Enjoy your sub par internet service.
    4
  • Quote:
    Not only this merger should not happen, but major monopolistic companies should be divided.

    That makes no difference when individual baby-Bells stay within their respective territories.

    Infrastructure is a natural monopoly: any given market can only support two, maybe three economically viable providers. With each provider only raking in 33-50% of possible revenues within an area but each having to eat nearly 100% of the costs regardless of market share, having two physical infrastructures to choose from more than doubles costs.

    If you want to drastically lower costs while improving service quality, you need to aim for a fully converged utility model where all service providers go over a shared infrastructure to eliminate massive cost duplication in boilerplate access stuff. Many countries with affordable high-speed broadband use some form of co-owned infrastructure to minimize unnecessary duplication.
    13