Comcast’s plan to buy Time Warner Cable for $45 billion will create an enormous company with extensive control over the television content and Internet services a large portion of the country receives.
Here’s what the deal, if approved by regulators, means for you.
Q: How does this affect who I can choose for cable?
A: Actually, it probably doesn’t. Cable companies have carved up the country in a way that means that Comcast and Time Warner don’t compete directly for paying television customers.
Q: I’m a Time Warner customer. What happens to my account?
A: Comcast wants to acquire all of Time Warner’s approximately 11 million subscribers under the deal. So, if you’re a Time Warner customer, you’re poised to become a Comcast customer.
To get the deal past regulators, though, Comcast has said that it is “prepared to divest” systems that serve about 3 million of its customers – meaning they’ll probably sell those contracts to another provider. It doesn’t, however, say, where those customers are.
Q: What if I’m a Comcast customer?
A: In terms of service, Comcast said that it’s going to add a few key features from Time Warner Cable’s list of services to its network. That would include Start Over, which lets viewers restart a live program that’s already in progress, and LookBack, which allows them to watch programs up to three days after they air live, even without a DVR. Comcast also said it’s keeping Time Warner Cable’s networks of 30,000 community wifi hotspots, and its home security system, IntelligentHome.
Time Warner Cable customers, should they become Comcast customers, will also be able to buy Comcast services, including its premium television service Xfinity.
Q: How about my Internet?
A: It’s worth remembering that Comcast caps how much data its customers are able to stream from the Internet, while Time Warner Cable offers unlimited Internet plans.
It’s not clear what will happen to those plans, or Time Warner’s pricing structure, under the terms of the deal, but it’s possible that regulators may ask Comcast to keep that consumer-friendly unlimited option — consumer advocates are certainly likely to bring it up as part of their comments on the proposal.
Q: Will prices go up?
A: We don’t know yet. The companies have not commented on their pricing strategy. They are arguing that network speeds, video experience and WiFi networks will all improve through a combined company.
Consumer advocates however, are already raising concerns. Public Knowledge said that the proposed deal would make Comcast, already the country’s largest Internet service, video and home phone provider, just too big. This deal, combined with Comcast’s past acquisition of NBC Universal, is particularly troubling to the public interest group because they think it gives Comcast too much power over the companies that make television shows and get them to our screens.
Some public interest groups say that Comcast’s acquisition of NBC has already sent prices creeping up – and the same could happen if it is allowed to acquire Time Warner.
Regulators are expected to look closely at that issue, and pay particular attention to whether a larger Comcast would also affect streaming video companies such as Netflix.
Q: Okay. But is this deal actually going to happen?
A: That’s also up in the air. The deal must be approved by the Federal Communications Commission and the Department of Justice; Comcast said it expects that review to last until the end of 2014.
Because the companies don’t compete for TV customers, it’s hard to argue that this deal will decrease competition. But the FCC may have more to think about.
On a press call discussing the deal, Comcast chief executive and chairman Brian L. Roberts said that Comcast will also extend FCC-mandated “net-neutrality” terms — an agreement not to favor its own content over competitor content — to its new, larger network. The firm agreed to those terms as a condition of its NBC acquisition; they are in effect until the start of 2018.
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