In a not-so-surprising move, satellite provider Dish Network (DISH) urged the Federal Communications Commission to block the potential $45 billion merger between Comcast (CMCSA) and Time Warner Cable (TWC).
After meeting with FCC officials earlier this week, Dish wrote in an FCC filing yesterday, “The pending Comcast/Time Warner Cable merger presents serious competitive concerns for the broadband and video marketplaces and therefore should be denied.”
Yahoo Finance Senior Columnist Michael Santoli says in part, Dish is implicitly making the case that Comcast and Time Warner Cable want to make. The two companies say in effect, the market in which we participate is not just the cable broadband business. It’s a free for all. There are satellite providers. You have telecom providers who want to get into it. You also have over-the-top providers like Netflix (NFLX) and Amazon (AMZN). Therefore, Santoli says Comcast and Time Warner would argue, we don’t own anything much more if our two companies merge.
Comcast responded to Dish's filing by saying, “Dish has long been one of our most vigorous competitors, and unlike us has a national footprint available in tens of millions of more homes than a combined Comcast–Time Warner Cable. Dish not wanting stronger competitors isn’t surprising and it isn’t new.”
Among Dish’s concerns are the amount of leverage the combined Comcast-Time Warner Cable would have in broadband service and the deals it could negotiate with programmers.
Santoli said that having leverage with programmers is not necessarily a bad thing because Comcast could potentially negotiate lower fees, which may not be seen as negative by the FCC, especially since we've seen fees rise in recent years.
Santoli says the FCC and the Justice Department is already looking into these concerns regarding these potential mergers. Dish looks like the orphan in all these mergers at the moment, but in theory, in a year or two, they could be partner to a similar type of deal, he said
However, Dish is not alone. Netflix and some smaller cable operators, as well as some programmers have also raised concerns about the Comcast-Time Warner Cable deal. Consumer groups also oppose the deals, saying it could mean fewer choices for customers and higher bills.
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