Following its merger with Time Warner Cable, Comcast posted a press release on its website that hummed with buzzwords. Sentences such as, “This transaction will create a leading technology and innovation company, differentiated by its ability to deliver ground-breaking products on a superior network while leveraging a national platform to create operating efficiencies and economies of scale.” All very dizzying.
What does this really mean? The statement is almost in a different language, but it just says more of the same. “Buying Time Warner will allow us to service our customers while growing as a company,” is the gist of it. Is this a good thing?
Comcast states that they will have “Startover” and “Lookback,” two new services that will allow the consumer to record and re-watch live broadcasts without the use of a DVR. They also paid $159 per share in the bidding process, a 17 percent increase in stock for shareholders. Comcast paid more than $45 billion for Time Warner, and says that the merge will generate more competition.
This merger is absolutely ridiculous.
In its press release, Comcast states “in order to reduce competitive concerns, Comcast is prepared to divest systems serving approximately 3 million managed subscribers.” Comcast is willing to completely drop nearly 3 million pre-existing subscribers simply to avoid “competitive concerns.” Why? Just to regain them again when other businesses can no longer compete? A Time Warner Cable shareholder is currently filing a class action law suit against Comcast, saying that the bid for shares was too low and did not account for future growth of the company, cheating stockholders. Additionally, he argues that this merger of the two largest cable companies in the U.S. teeters on the edge of becoming a monopoly. The merger needs approval by both the Federal Communications Commission and the Justice Department.
Is Theodore Roosevelt in office? Monopolies are illegal, and whether it is the oil industry or the media industry does not matter. The merger will discourage competition while allowing Time Warner to not worry about improving their infamously horrid service. Let’s face it; the class-action lawsuit was only filed because that shareholder feels cheated out of “his” money.
This contestable business decision is not only risky to both corporations, but insulting to the American people. A few fistfuls of cash flung in the face of Time Warner executives is enough to create an enormous media corporation. The aftermath will be devastating: favorite shows and channels dropped, control over other enormous media companies, and all around disappointing internet and cable service. In this day and age, the Internet is virtually vital to the survival of the American young adult. The merger will essentially kill our youth. While the press release was cleverly composed, dissecting it only reveals the dastardly intentions of the major corporation. Time will tell if the proposition passes, but hopefully the FCC will come to its senses before it is too late.