Comcast defends Time Warner Cable deal as U.S. review kicks off

Tue Apr 8, 2014 4:47pm EDT
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By Alina Selyukh and Liana B. Baker

WASHINGTON/NEW YORK (Reuters) - Comcast Corp sought to rebut critics of its planned $45.2 billion takeover of Time Warner Cable Inc, arguing that newcomers like Google Inc and Apple Inc would ensure competition in both Internet and video markets.

In a 175-page filing with the Federal Communications Commission that kicks off the FCC's review of the deal, Comcast argues that combined with Time Warner Cable, it will compete with an "array of sophisticated companies with national or even global footprints" such as Google, Netflix Inc or Verizon that have gained ground against Comcast.

"In the evolving video marketplace in which these companies have thrived, there is no reason why a cable company should be limited in evolving as well," Comcast's filing said.

"Over the last few years, our competitors have evolved into being much larger companies by revenue, by cash flow and or by customers than we are to all have a larger geographic scope than we have," Comcast Executive Vice President David Cohen told reporters after the filing was made public on Tuesday.

If approved by the Justice Department and the FCC, the merger would result in a company that would serve just under 30 percent of the U.S. pay television video market, after Comcast's plan to divest 3 million subscribers.

The merged provider would also serve between 20 percent and 40 percent of U.S. broadband subscribers, depending on whether wireless broadband offered by telecom companies is included, Comcast said.

Opponents have raised concerns that the sheer size of the merged company would give it too much control over what Americans can watch on television and do online as Comcast boosts its power as a buyer of web and pay-TV content.

"The great equalizer is that for many of those companies, they don't own the network in the high-speed video marketplace," said Chris Lewis, vice president for government affairs at consumer interest group Public Knowledge, referring to Google, Apple, Netflix and other content providers Comcast cited as its growing competitors.   Continued...

A man enters the Time Warner Cable headquarters in New York February 13, 2014. REUTERS/Joshua Lott