Small cable operator advocate American Cable Association (ACA) and rural broadcast association NTCA are concerned about the "potential competitive harms" that would accompany a Comcast (NASDAQ: CMCSA)-Time Warner Cable (NYSE: TWC) merger, including "a final result [that] will likely be higher prices and fewer choices for consumers."
The organizations voiced concerns via a letter from ACA President-CEO Matt Polka and NTCA CEO Shirley Bloomfield to members of the Senate Judiciary Committee in advance of today's hearing on the merger. In particular, the organizations are worried that a combination of Comcast and Time Warner Cable programming assets could give the merged entity "greater bargaining power against all MVPDs that carry this programming by bundling more 'must have' programming together," according to a copy of the letter, which was obtained by FierceCable.
Merged broadcast programming assets could be aggravated in areas where Comcast and TWC both own and operate properties, such as New York City, Los Angeles and Dallas and could band together, the letter said.
From a cable programming perspective, the "merged entity will have an incentive to disadvantage MVPDs that compete with TWC by either withholding Comcast programming from them permanently or temporarily during negotiation impasses or simply by forcing them to pay higher prices for this programming."
The ACA and NCTA cited at least 20 member companies with at least a 10 percent competitive overlap with TWC. Many members purchase programming through the National Cable Television Cooperative (NCTC) and "Comcast-TWC will have an incentive to raise the prices that it charges to this buying group."
Both these programming concerns were part of a previous objection the organizations voiced before Comcast's successful acquisition of NBCUniversal.
This proposed merger also presents a new concern: with 30 percent of the subscriber audience, the new entity would have the ability to wrangle pricing structures that smaller MVPDs, with smaller subscriber bases, cannot meet.
"In the longer run, Comcast-TWC may be able to leverage its increased dominance in the MVPD industry to increase its market share in the video programming industry, therefore ultimately reducing the competitiveness of this industry as well."
Wide Open West and ACA Chairwoman Colleen Abdoulah told a luncheon audience at the recent ACA Summit that the organization expects the Comcast-Time Warner Cable merger to be approved and that that it's "ridiculous" to fight it. On the other hand, she presaged today's letter by stating that the ACA would insist that "thoughtful conditions" be applied to the merger, citing the possibility that merged programming power is the "scariest part" of the merger.
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