Comcast - Time Warner Cable Merger Fails: What Does That Mean for Latinos and the Future, Comcast has relinquished its bid to buy Time Warner Cable, dropping a proposed merger deal between the two largest cable companies in the U.S. estimated at about $45 billion.
The nation's largest cable company, which also provides high-speed access to a large number of Americans, released a statement (via Wired) saying, "Today, we move on."
On the failed merger, Comcast's statement continued: "Of course we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn't agree, we could walk away."
Already reportedly in trouble after meetings with the Department of Justice, the news that the Federal Communications Commission staff recommended a hearing over the merger -- a move that likely signaled even more regulatory opposition to the buyout -- may have sealed the broken deal.
Critics of the megamerger deal said that if the acquisition had been allowed to go through, the resulting company would control over 30 percent of the pay TV market and over half of the country's broadband Internet service market -- which, now defined as Internet speeds of at least 25 mbps, would be the only broadband provider in several areas of the country. Of course, even without the merger, that fact of lack of broadband competition in many markets remains true, and troubling.
What It Means for Latinos:
A Blow to Internet Essentials
Any big change in the Internet industry affects Latinos especially, as studies have shown that Latinos tend to be "ahead of the digital curve" compared to the average consumer in the U.S. For example, Latinos are the leading demographic in online media use, spending 68 percent more time than average consumers watching online video and 20 percent more time streaming on mobile devices.
But according to Pew, on the other hand low-income Latinos tend to have among the lowest level of access to home broadband in the country, instead relying on either smartphones, local public broadband access points in schools or libraries, or signing up for special programs that allow discount cable Internet access, like Comcast's Internet Essentials.
Internet Essentials provides cable Internet for less than $10 per month, along with an option to buy a basic internet-ready computer for under $150 and free digital literacy training in English or Spanish.
The expansion of Comcast's Internet Essentials program to Time Warner Cable territories was part of Comcast's public argument in favor of the merger, though critics argued barriers for entry into the program were too high, and the Internet speeds provided doesn't meet the FCC's definition of broadband.
A Boon for Latino TV Choice
Another consideration for Latinos comes down to the older medium: television.
While the Comcast/TWC merger would have put over 50 percent of the country's broadband under one company's purview -- due to the particular combination of the two companies' markets and the broad trends of where Hispanic families tend to live -- the resulting merged corporation would have effectively controlled all cable TV and cable Internet options for over 90 percent of Latinos in the U.S., according to Univision, which criticized the deal.
Univision was against the merger almost from the start, with chief executive Randy Falco telling media analysts the deal could be "bad for Hispanic audiences," citing worries over Comcast's reluctance to carry Univision Deportes -- the sports channel of Univision, the most popular Latino network in the U.S. -- in favor of Telemundo, which Comcast owns.
The companies later reached a deal over Univision Deportes, but not until after Falco publically criticized the proposed merger, saying:
"The new Comcast will serve markets with 91 percent of all Hispanic households and will be the top TV distributor in 19 out of the top 20 Hispanic markets. That gives this new company staggering influence over Hispanic consumers...Either Comcast doesn't understand that soccer is a passion point for Hispanics or they don't support competitors who have competing services. My fear is that the latter is the case and this type of anti-competitive conduct would continue."
The Future of American Broadband: A Long Way to Go While critics are celebrating the demise of the possible mega-company that would have emerged from a successful merger, one argument from Comcast in favor of the merger remains true: The merger would not have stamped out any broadband competition in either Comcast or Time Warner Cable's markets.
That's true, but the reason it's true is that the state of broadband Internet in the country is largely uncompetitive, even monopolist in some areas, and overall, falling behind the world in speed and affordability.
The end of the Comcast/TWC merger deal may have prevented one company from gaining an inordinate amount of control over the America's available broadband -- clearly one of the most important tools for any competitive 21st Century economy -- but Comcast's defeat won't make your Internet any faster or cheaper, either. And that's the larger issue that still needs to be addressed.
On the failed merger, Comcast's statement continued: "Of course we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn't agree, we could walk away."
Already reportedly in trouble after meetings with the Department of Justice, the news that the Federal Communications Commission staff recommended a hearing over the merger -- a move that likely signaled even more regulatory opposition to the buyout -- may have sealed the broken deal.
Critics of the megamerger deal said that if the acquisition had been allowed to go through, the resulting company would control over 30 percent of the pay TV market and over half of the country's broadband Internet service market -- which, now defined as Internet speeds of at least 25 mbps, would be the only broadband provider in several areas of the country. Of course, even without the merger, that fact of lack of broadband competition in many markets remains true, and troubling.
What It Means for Latinos:
A Blow to Internet Essentials
Any big change in the Internet industry affects Latinos especially, as studies have shown that Latinos tend to be "ahead of the digital curve" compared to the average consumer in the U.S. For example, Latinos are the leading demographic in online media use, spending 68 percent more time than average consumers watching online video and 20 percent more time streaming on mobile devices.
But according to Pew, on the other hand low-income Latinos tend to have among the lowest level of access to home broadband in the country, instead relying on either smartphones, local public broadband access points in schools or libraries, or signing up for special programs that allow discount cable Internet access, like Comcast's Internet Essentials.
Internet Essentials provides cable Internet for less than $10 per month, along with an option to buy a basic internet-ready computer for under $150 and free digital literacy training in English or Spanish.
The expansion of Comcast's Internet Essentials program to Time Warner Cable territories was part of Comcast's public argument in favor of the merger, though critics argued barriers for entry into the program were too high, and the Internet speeds provided doesn't meet the FCC's definition of broadband.
A Boon for Latino TV Choice
Another consideration for Latinos comes down to the older medium: television.
While the Comcast/TWC merger would have put over 50 percent of the country's broadband under one company's purview -- due to the particular combination of the two companies' markets and the broad trends of where Hispanic families tend to live -- the resulting merged corporation would have effectively controlled all cable TV and cable Internet options for over 90 percent of Latinos in the U.S., according to Univision, which criticized the deal.
Univision was against the merger almost from the start, with chief executive Randy Falco telling media analysts the deal could be "bad for Hispanic audiences," citing worries over Comcast's reluctance to carry Univision Deportes -- the sports channel of Univision, the most popular Latino network in the U.S. -- in favor of Telemundo, which Comcast owns.
The companies later reached a deal over Univision Deportes, but not until after Falco publically criticized the proposed merger, saying:
"The new Comcast will serve markets with 91 percent of all Hispanic households and will be the top TV distributor in 19 out of the top 20 Hispanic markets. That gives this new company staggering influence over Hispanic consumers...Either Comcast doesn't understand that soccer is a passion point for Hispanics or they don't support competitors who have competing services. My fear is that the latter is the case and this type of anti-competitive conduct would continue."
The Future of American Broadband: A Long Way to Go While critics are celebrating the demise of the possible mega-company that would have emerged from a successful merger, one argument from Comcast in favor of the merger remains true: The merger would not have stamped out any broadband competition in either Comcast or Time Warner Cable's markets.
That's true, but the reason it's true is that the state of broadband Internet in the country is largely uncompetitive, even monopolist in some areas, and overall, falling behind the world in speed and affordability.
The end of the Comcast/TWC merger deal may have prevented one company from gaining an inordinate amount of control over the America's available broadband -- clearly one of the most important tools for any competitive 21st Century economy -- but Comcast's defeat won't make your Internet any faster or cheaper, either. And that's the larger issue that still needs to be addressed.
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