Comcast Time Warner, Comcast announced today that it is ending its quest to acquire Time Warner. Brian Roberts, Comcast CEO, said, “We structured this deal so that if the government didn’t agree, we could walk away.” It turns out that the government didn’t agree.
Exactly how and why the government didn’t agree remain shrouded in mystery. Was the proposed merger inherently flawed, doomed to failure from its February 2014 announcement? Or was the merger undermined only by recent market changes unforeseen 14 months ago? Let’s have an autopsy of the merger to find out.
Today Attorney General Eric Holder trumpeted the abandonment of the merger at the Department of Justice website saying that the merger fell apart only “after the Department of Justice informed the companies that it had significant concerns that the merger would make Comcast an unavoidable gatekeeper for Internet-based services that rely on a broadband connection to reach consumers.”
The concept that the proposed merger would make Comcast an “Internet gatekeeper” is easily articulated, but is it an accurate statement? And is the statement of the potential market power of Comcast more accurate today or in February 2014? It seems, in the eyes of the Federal Communications Commission, the possibility of Comcast becoming a gatekeeper was more likely in February 2014 than today, yet the FCC did not openly oppose the merger at the time.
Just last month, the Federal Communications Commission issued new rules, commonly referred as network neutrality regulations, that, according to Chairman Tom Wheeler, would prevent broadband service providers such as Comcast from blocking Internet-based services. According to Wheeler, before the network neutrality rules and when the Comcast-Time Warner merger was announced, “Before the Commission adopted this Order, there were no rules preventing broadband providers from conduct that would threaten the Open Internet.” Wheeler said that the network neutrality regulations “will preserve and protect the Internet as a platform for innovation, expression and economic growth. An Open Internet means consumers can go where they want, when they want. It means innovators can develop products and services without asking for permission.”
Wheeler made these remarks without qualifying conditions on market structure or the prevention of companies such as Comcast engaging in mergers and acquisitions, such as the Comcast-Time Warner merger pending before the FCC. Reasonable individuals may disagree with Wheeler’s views of the salutary effects of the new FCC rules, but the Department of Justice does not appear to have been among those reasonable individuals. There are no public records of DoJ filing comments in the FCC’s network neutrality proceeding, much less a record of DoJ claiming the network neutrality rules were insufficient to protect “Internet-based services that rely on a broadband connection to reach consumers.”
Holder emphasizes that blocking the merger would benefit content industries, as if antitrust law is to benefit one industry over another rather than directly consumers. “This is a victory not only for the Department of Justice, but also for providers of content and streaming services who work to bring innovative products to consumers across America and around the world.” Whether the proposed merger would have harmed a separate industry is a debatable and empirical and highly doubtful matter. Holder’s press statement does not once refer to antitrust laws or to provisions of those laws, or to the new FCC network neutrality rules designed in part to protect the same industry that Holder sees as the victors in blocking the Comcast-Time Warner merger.
Today Attorney General Eric Holder trumpeted the abandonment of the merger at the Department of Justice website saying that the merger fell apart only “after the Department of Justice informed the companies that it had significant concerns that the merger would make Comcast an unavoidable gatekeeper for Internet-based services that rely on a broadband connection to reach consumers.”
The concept that the proposed merger would make Comcast an “Internet gatekeeper” is easily articulated, but is it an accurate statement? And is the statement of the potential market power of Comcast more accurate today or in February 2014? It seems, in the eyes of the Federal Communications Commission, the possibility of Comcast becoming a gatekeeper was more likely in February 2014 than today, yet the FCC did not openly oppose the merger at the time.
Just last month, the Federal Communications Commission issued new rules, commonly referred as network neutrality regulations, that, according to Chairman Tom Wheeler, would prevent broadband service providers such as Comcast from blocking Internet-based services. According to Wheeler, before the network neutrality rules and when the Comcast-Time Warner merger was announced, “Before the Commission adopted this Order, there were no rules preventing broadband providers from conduct that would threaten the Open Internet.” Wheeler said that the network neutrality regulations “will preserve and protect the Internet as a platform for innovation, expression and economic growth. An Open Internet means consumers can go where they want, when they want. It means innovators can develop products and services without asking for permission.”
Wheeler made these remarks without qualifying conditions on market structure or the prevention of companies such as Comcast engaging in mergers and acquisitions, such as the Comcast-Time Warner merger pending before the FCC. Reasonable individuals may disagree with Wheeler’s views of the salutary effects of the new FCC rules, but the Department of Justice does not appear to have been among those reasonable individuals. There are no public records of DoJ filing comments in the FCC’s network neutrality proceeding, much less a record of DoJ claiming the network neutrality rules were insufficient to protect “Internet-based services that rely on a broadband connection to reach consumers.”
Holder emphasizes that blocking the merger would benefit content industries, as if antitrust law is to benefit one industry over another rather than directly consumers. “This is a victory not only for the Department of Justice, but also for providers of content and streaming services who work to bring innovative products to consumers across America and around the world.” Whether the proposed merger would have harmed a separate industry is a debatable and empirical and highly doubtful matter. Holder’s press statement does not once refer to antitrust laws or to provisions of those laws, or to the new FCC network neutrality rules designed in part to protect the same industry that Holder sees as the victors in blocking the Comcast-Time Warner merger.
Blogger Comment
Facebook Comment