Dish Networks has joined a coalition that aims to stop Charter Communications’ big-money acquisition of Time Warner Cable.
The Stop Mega Cable Coalition comprises 13 bodies, including AT&T-owned cable firm Dish, public interest groups, the Writers Guild of America (East and West) and a telecoms-broadband association.
The SMCC aims to “highlight both the stunning scale of the proposed merger” and the overwhelming cable and broadband duopoly that the new company would form alongside Comcast”.
The group claims one effect of the deal would be to threaten emerging OTT services such as Netflix and Amazon Prime Instant Video as just two companies would affectively control most of the US broadband market.
A predecessor group, the Stop Mega Comcast Coalition, successfully helped to block Comcast’s deal to acquire Time Warner Cable, which would have created a huge market-leading cable and internet group in the US.
Comcast rival Charter, which Liberty Global owner John Malone backs, then moved to buy TWC, in a merger agreement that valued TWC at US$78.7 billion in May last year.
The coalition wants the US’s Department of Justice and media regulator the FCC to block the Charter deal as this new “mega company” would “control more than a third of the markets for cable pay TV [35 percent] and cable broadband [36 percent]”, and that two-thirds of subscribers “would have no other option for high-speed broadband”.
It also claimed the deal would create a market duopoly of Charter-TWC and Comcast, which between them would control “about 90 per cent of all high-speed broadband connections in the country”.
This means Charter-TWC and Comcast could “control the fate” of bandwidth-sapping video platforms – primarily market leader Netflix – by changing their high-speed broadband connections and raising prices.
The coalition said the likelihood was Comcast and Charter-TWC would treat their own OTT services and content “favourably”.
Furthermore, the SMCC alleged the two firms could “coordinate their actions by simply responding to the others’ behaviour”, and could “take the form of parallel action or even express agreements”.
Independent producers would also be negatively affected, the coalition claimed. This would be because the two cable firms could work together to offer “below-market terms” and restrict their ability to sell content to rival SVOD firms.
Netflix CEO Reed Hastings has, however, previously given his blessing to the merger, and regulators in New York gave it approval earlier this month.
“It feels like Groundhog Day with yet another mega cable merger threatening to consolidate too much of this country’s high-speed broadband connections, all to the detriment of competition and consumer choice,” said Jeffrey Blum, senior VP and deputy general counsel of Dish.
“This merger severely threatens the innovative online streaming services that rely on a robust broadband connection. ‘Mega Cable’ simply does not serve the public interest, and Charter has failed to prove otherwise.”
A Charter statement reported on several US sites read: “It should come as no surprise that Dish and other parties seeking to use the regulatory review process to extract concessions are also engaging in tired PR tactics to further their self interests. Their arguments against the pending transactions are baseless.”