7 ms·

It's a bit different in this situation. Comcast and Time Warner do not currently compete with each other.

by bryanpaluch 13y ago

rhizome 13y ago
Something tells me that if that's the linchpin for the deal going through, it's not an accident.
- ericd 13y ago
  It's definitely not, these companies trade territory, and when an upstart that's not part of the collusion (like Verizon FIOS) comes in, they finally upgrade and cut prices on that part of their network to be competitive, so that it's not profitable for them to come in.
logn 13y ago
Sad but true. They should deny the acquisition and then launch a lawsuit for unfair competition/collusion.
DannyBee 13y ago
and now, they never will, which would be the focal point of any antitrust attack. Also, the DOJ does not have sole authority to challenge. Here is the breakdown for telecommunications (taken from DOJ website, http://www.justice.gov/atr/icpac/3b.htm http://www.justice.gov/atr/icpac/3b.htm) Telecommunications. Mergers involving telecommunications service providers usually are subject to competition policy review or challenge by: One of the federal antitrust agencies (only the DOJ has jurisdiction to review mergers involving telephone companies; both the DOJ and the FTC have reviewed mergers between cable television firms); The Federal Communications Commission (FCC);(8) The PSC of each state in which the parties do business (although most state PSCs lack jurisdiction over cable television mergers and some lack jurisdiction over mergers); In the case of cable television, county and municipal authorities with responsibility for granting and overseeing cable franchise agreements; The attorney general of each state in which the merging parties do business; and Private entities such as competitors to the merging parties. As with mergers involving electric power firms, review by any of these entities is nonexclusive. Approval of a transaction by one entity does not preclude a separate challenge by any of the other entities, nor does it bar another entity from seeking adjustments that exceed concessions that resolved the concerns of other bodies. I suspect the DOJ (who has sole jurisdiction in telecommunications) will object, and that comcast is just willing to fight it out in court.
beambot 13y ago
Isn't that simply because they have a "gentlemans agreement" not to have overlapping coverage, so that (to an individual customer) they are essentially a monopoly?
- wmf 13y ago
  Or cable is just a natural monopoly.
  - bunderbunder 13y ago
    The physical network is absolutely a natural monopoly - the cost to run copper out to every house in a region is fixed, and any player in the market would need to do just that in order to compete effectively. From a cost efficiency perspective, the ideal number of such networks is one, just as it is for electricity and water. What's different is that electricity tends to be heavily regulated, and water is generally a public utility. Cable providers are historically under no such constraint, because we tend to think of them as television content providers first and foremost, and the TV bit of the business is not a natural monopoly. Unfortunately that is where they make their money, and that leads to some really obnoxious behavior, including price gouging people who want their network services but not a TV content subscription. Probably the best solution would be to go the same route that many other countries do and require network operators to share network bandwidth with anyone who can pay for it. That would allow us to re-instate market competition on top of the bit where it cannot occur naturally, while still allowing them to maintain their regularly scheduled TV industry whatever-ness.
    - wmf 13y ago
      Cable TV also seems like a natural monopoly for the same reason as cable Internet — the cost of running the cable itself. Even before cable modems, most places only had one cable company. And my understanding is that cable franchise agreements were written with that assumption. Maybe I don't understand your argument, though.
      - 13y ago
EpicEng 13y ago
Right, by design, which is the reason I have crap internet service and no real choices. It's collusion, pure and simple, I don't know why it has been allowed to go on for so long.

It's a bit different in this situation. Comcast and Time Warner do not currently compete with each other.

rhizome 13y ago

Something tells me that if that's the linchpin for the deal going through, it's not an accident.

ericd 13y ago
It's definitely not, these companies trade territory, and when an upstart that's not part of the collusion (like Verizon FIOS) comes in, they finally upgrade and cut prices on that part of their network to be competitive, so that it's not profitable for them to come in.

logn 13y ago

Sad but true. They should deny the acquisition and then launch a lawsuit for unfair competition/collusion.

DannyBee 13y ago

and now, they never will, which would be the focal point of any antitrust attack. Also, the DOJ does not have sole authority to challenge. Here is the breakdown for telecommunications (taken from DOJ website, http://www.justice.gov/atr/icpac/3b.htm http://www.justice.gov/atr/icpac/3b.htm) Telecommunications. Mergers involving telecommunications service providers usually are subject to competition policy review or challenge by: One of the federal antitrust agencies (only the DOJ has jurisdiction to review mergers involving telephone companies; both the DOJ and the FTC have reviewed mergers between cable television firms); The Federal Communications Commission (FCC);(8) The PSC of each state in which the parties do business (although most state PSCs lack jurisdiction over cable television mergers and some lack jurisdiction over mergers); In the case of cable television, county and municipal authorities with responsibility for granting and overseeing cable franchise agreements; The attorney general of each state in which the merging parties do business; and Private entities such as competitors to the merging parties. As with mergers involving electric power firms, review by any of these entities is nonexclusive. Approval of a transaction by one entity does not preclude a separate challenge by any of the other entities, nor does it bar another entity from seeking adjustments that exceed concessions that resolved the concerns of other bodies. I suspect the DOJ (who has sole jurisdiction in telecommunications) will object, and that comcast is just willing to fight it out in court.

beambot 13y ago

Isn't that simply because they have a "gentlemans agreement" not to have overlapping coverage, so that (to an individual customer) they are essentially a monopoly?

wmf 13y ago
Or cable is just a natural monopoly.
- bunderbunder 13y ago
  The physical network is absolutely a natural monopoly - the cost to run copper out to every house in a region is fixed, and any player in the market would need to do just that in order to compete effectively. From a cost efficiency perspective, the ideal number of such networks is one, just as it is for electricity and water. What's different is that electricity tends to be heavily regulated, and water is generally a public utility. Cable providers are historically under no such constraint, because we tend to think of them as television content providers first and foremost, and the TV bit of the business is not a natural monopoly. Unfortunately that is where they make their money, and that leads to some really obnoxious behavior, including price gouging people who want their network services but not a TV content subscription. Probably the best solution would be to go the same route that many other countries do and require network operators to share network bandwidth with anyone who can pay for it. That would allow us to re-instate market competition on top of the bit where it cannot occur naturally, while still allowing them to maintain their regularly scheduled TV industry whatever-ness.
  - wmf 13y ago
    Cable TV also seems like a natural monopoly for the same reason as cable Internet — the cost of running the cable itself. Even before cable modems, most places only had one cable company. And my understanding is that cable franchise agreements were written with that assumption. Maybe I don't understand your argument, though.
    - 13y ago

EpicEng 13y ago

Right, by design, which is the reason I have crap internet service and no real choices. It's collusion, pure and simple, I don't know why it has been allowed to go on for so long.