Here’s Why the Biggest Cable Company in the Country Thinks It Can Get Bigger
So Comcast, in a sort-of surprise, is going to end up buying all of Time Warner Cable for itself.
If you are a regular person, and you hear that the biggest cable company in the country is going to buy the second biggest cable company in the country, your reaction is probably something along the lines of this:
And you might also wonder if regulators are going to do anything to stop it. After all, didn’t the feds stop AT&T from buying T-Mobile a couple years ago?
You’ll hear a lot more about this tomorrow, first from Comcast* and Time Warner Cable, who will officially announce/defend their deal, and then from people who can talk about this stuff with sophistication, like my colleague Amy Schatz.
But for now, you get me, typing it out slowly.
So here’s the big idea that’s supposed to get the deal approved in the coming months: It’s okay for a giant cable company to buy another giant cable company, because cable companies don’t compete.
For instance: I live in Brooklyn, and I’m a Time Warner Cable customer. In theory, I could also get TV from the satellite guys, and also from Verizon. But I can’t get TV from Comcast, because the cable guys work in specific territories, carved out by local regulators, and they don’t overlap.**
Assuming the deal goes through, it’s not going to reduce my (limited) choices. I’m just going to start writing checks to Comcast instead.
And that’s about it. You’ll hear more tomorrow about Comcast’s increased leverage with programmers, and better technical facilities. And Comcast is going to make some moves to appease the feds from the get-go, like selling off 3 million of its subscribers to other cable operators, which would mean it ends up with 30 million subscribers total.
And maybe regulators will give this deal more scrutiny than Comcast expects, so you might see other concessions.
But even though this one sounds like a huge deal — $44 billion does tend to sound huge — it’s hard to see much changing for consumers any time soon. Which is why Comcast thinks it will get done.
* Comcast owns NBCUniversal, which is an investor in the company that owns this website.
**Recall that a few years ago, the feds blessed a peace treaty between Verizon and Comcast, who actually are competitors.
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