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The most valuable infrastructure that Comcast and Time Warner run is ye olde copper coax lines in the "last mile", often built a long time ago and at a large pu
by fiatmoney 13y ago
The most valuable infrastructure that Comcast and Time Warner run is ye olde copper coax lines in the "last mile", often built a long time ago and at a large public subsidy (either explicit or implicit via a grant of monopoly). What little infrastructure investment they do make (eg, laying fiber) is a result of actual competition, which would be lessened by the merger.
By way of analogy, having clean water is important, but water infrastructure is not high-value-added ("buy Water Premium Max Plus! only 79.99/month!"); it's a basic utility. The alternative to Comcast isn't "no internet", it's a public utility wire-owner. Which would provide roughly the same level of service that Comcast actually provides, in the vast majority of areas.
And exploiting a monopoly on infrastructure is almost the Platonic ideal of rent-seeking.
- rayiner 13y agoCable companies spend $17 billion a year on CapEx, and telecom services, excluding wireless, spend another $46 billion more. http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/capex.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/.... That's a lot of money for companies that are just resting on the publicly subsidized networks they built in the 1980s... Snark aside, most of the modern hybrid fiber-coax network that cable companies actually use today were built after deregulation in the 1990's. And it continues to be upgraded, which is where that massive CapEx comes in.
- fiatmoney 13y agoUtility (general), which I believe ~ electric co's, spends $31 billion. Absolute numbers don't tell you anything; maintaining even a completely static infrastructure costs something.
- rayiner 13y agoYou said "what little infrastructure investment they do make" which is directly contradicted by the enormous infrastructure investments they make. Also, electric companies are in the middle of a huge push to replace aging coal plants with gas and renewables. There is a ton of value being added in that sector right now.
- pbhjpbhj 13y agoNet Cap Ex / Sales = 0.05% ? I was going to ask what revenue they were bringing in with that CapEx. Am I right in thinking this means they're bringin in $34,000 million from sales and spending only $17 million on infrastructure. That doesn't look like "a lot of money" in relative terms - I must be misreading those figures?
- rayiner 13y agoI'm not sure what that column means, but the capex column is in thousands. So $17 billion.