Comcast and Time Warner Cable on Wednesday came out swinging against opponents of their proposed merger. Critics are concerned that the acquisition would threaten both consumers, who could potentially face higher prices, as well as competition.
However, the two companies claimed that opponents like Netflix, Dish, Discovery and Viamedia are either peddling misinformation or opposing the merger to promote their own interests. That's according to a filing by Comcast and Time Warner Cable with the U.S. Federal Communications Commission (FCC) that runs hundreds of pages long,
Comcast called out Netflix specifically, saying the company tried to gain undue business leverage, according to the Wall Street Journal. Comcast cited an e-mail from Netflix CEO Reed Hastings to Comcast executives "in which he praised a paid interconnection deal the companies struck early this year to improve Netflix streaming quality for Comcast subscribers, saying the arrangement 'worked well for both of us for the long term,'" according to the Journal.
Comcast said Hastings had a different take on the matter during the merger proceedings and has since opposed the Comcast-TWC deal. In response, Netflix CEO Reed Hastings said he checked his e-mail for the comments Comcast attributed to him and "didn't find them," the Wall Street Journal reported. The Netflix exec said his position against paying for interconnection never changed, but "we felt we had no choice but to sign" the deal, according to the Wall Street Journal.
Announced in February, Comcast's plan is to acquire Time Warner via a $45.2 billion stock swap. If the deal between the two largest cable companies in the U.S. goes forward, it would result in an organization with control of over one-third of the nation's market. The merger requires the approval of both the FCC and the U.S. Justice Department.
Comcast: ‘Overheated Rhetoric’
The proposed merger is being opposed by a large number of media companies, other businesses and consumer advocacy organizations. Among those that have filed comments with the FCC are Free Press, the Consumers Union, CREDO, the National Organization for Women, the Parents Television Council and the Writers Guild of America East and West, as well as Netflix, Dish, Cogent, Discovery and others.
In their Wednesday filing with the FCC, Comcast and Time Warner asserted that the complaints of their opponents are "overstated, unfounded and often self-serving."
"The majority of arguments and allegations raised by petitioners are not transaction-specific and, therefore, are irrelevant to the Commission’s analysis in this proceeding," the filing stated. "To be sure, there are extended riffs on a generalized 'big is bad' theme, but this is symptomatic of the overheated rhetoric that large transactions always evoke."
In a blog post published Tuesday on Comcast's Web site, David Cohen, the company's executive vice president and chief diversity officer, said the merger promises "unquestioned consumer benefits such as higher speeds and more video choices for Time Warner customers," along with extended broadband services to cities like New York and "new choices and competition for business customers."
‘A Lot to Chew Through’
We reached out to Matt Wood, policy director for Free Press, to ask what his organization's response was to the latest filing by Comcast and Time Warner. He said his team was still reviewing the "voluminous" document and expected to submit its response by the FCC's next deadline on October 8.
"Part of their job is to try and make this look inevitable," Wood said of Comcast and Time Warner. "There's a lot here to chew through," he added, noting that many of the companies' arguments in this latest filing appeared to be "rehashing" previous statements rather than adding new insights into the merger's potential for benefit or harm.
"AT&T tried to play the same game with T-Mobile," Wood said, referring to the failed merger of those companies in 2011.
In that case, AT&T and T-Mobile gave up the plan after the Justice Department filed a complaint alleging the merger would mean mobile phone service customers across the U.S. "likely will face higher prices, less product variety and innovation, and poorer quality services due to reduced incentives to invest than would exist absent the merger."
The number of comments the FCC has so far received in response to the proposed Comcast-Time Warner merger is second only to the number submitted regarding the agency's consideration of new rules for Net Neutrality. According to the FCC's Web site, nearly 15,000 comments have been submitted regarding the merger over the past 30 days.