Monday marked a key deadline for regulators reviewing one of the biggest cable merger plans ever. With Comcast proposing to acquire Time Warner Cable, members of the public had until the end of Monday to file opening comments on the deal.
Some, such as consumer groups and Comcast's business rivals, were quick to denounce the merger. Others, including some politicians and charities, fully supported it. And in a blog post, Comcast executive vice president David Cohen reiterated that the deal is "pro-consumer, pro-competitive and strongly in the public interest."
The reality is that the merger, if it's approved, will likely come with strings attached. The question is what those strings will look like; expect a vigorous debate over what conditions should be imposed on the deal and how expansive they should be.
The Federal Communications Commission has wide latitude to determine the merger conditions Comcast will have to accept if it wants the agency's blessing. Comcast points to requirements it agreed to accept in 2011 — during the purchase of NBC Universal — as reasons why regulators should approve the company's acquisition of Time Warner Cable (TWC) in 2014. For this merger, Comcast has volunteered to abide by some of those old merger conditions, such as its time-limited commitment to the FCC's former net neutrality rules. Comcast would also shed about 3 million customers as it takes on more Time Warner Cable subscribers, to address competition concerns.
Some folks have other ideas. From New York Mayor Bill de Blasio to cable advertising firms to state public service commissions, there are those who believe that the FCC should impose stronger merger conditions. Here are a few of those ideas.
Make sure Internet Essentials actually works for more people. By some measures, Comcast's Internet access plan for low-income families has been a big success. The company has relaxed the eligibility requirements several times to include households with kids not just on free school lunches but also those who get reduced-price school lunches and children who attend private schools. But Comcast has also received some negative feedback on the program, with critics saying that even though many households are eligible for Internet Essentials, few have actually signed up. De Blasio and a number of others want Comcast to expand Internet Essentials to cover seniors and the disabled and to increase the basic speed of the service.
Extend Comcast's previous commitments by another two years. When Comcast bought NBC Universal in 2011, it agreed to a slew of conditions. These conditions expire in 2018. Comcast has said that if regulators agree to let the Time Warner Cable merger happen, the company will take the conditions it's already operating under and apply them to all of the current TWC subscribers who would become Comcast subscribers. But the New York Public Service Commission, which has been conducting its own, separate review of the proposal, wrote to the FCC that those commitments should be extended in duration, as well.
Limit Comcast's control over the cable advertising market. Comcast has rivals not just in the cable television business, but also in advertising, where Comcast plays a role in connecting pay-TV companies to advertisers that want to target their ads to specific media markets. Here's an example, according to one such rival known as Viamedia: Let's say a political candidate wanted to buy an ad on a national cable channel like ESPN, but the ad would only be shown to residents of Tampa, Fla. Through something called spot cable advertising, the candidate could buy a 30-second time slot targeting a local Tampa audience but not the rest of the country. A whole industry exists to facilitate these kinds of transactions, with the dominant pay-TV provider in many media markets assuming responsibility for making these deals work. That provider is often Comcast or Time Warner Cable, says Viamedia, arguing that letting the merger go through would give Comcast a lot of control over spot cable advertising and its associated industries. So it's proposing that Comcast be required to reduce its role in spot cable advertising.
In some ways, it's a little early to be talking about conditions at all; the FCC is still gathering information about the deal and won't jump to any conclusions. But the consensus in Washington appears to be that if the merger passes, conditions are inevitable.
"Assuming that there is some lull in the politics of this, you can certainly imagine some less-draconian merger conditions that Comcast would agree to that would be wholly expected," said Geoffrey Manne, executive director of the International Center for Law and Economics.