MIAMI (CBSMiami) – Comcast Corporation announced plans Wednesday to purchase Time Warner Cable in a $45 billion deal that would create a cable industry goliath.
The deal would join the two largest cable companies in America giving the new corporation a combined 30 million customers. The deal would be subject to approval form the Justice Department and other government agencies charged with stopping monopolies.
Putting the two companies together would give the new company arguably the unhappiest base of customers in the country. Both were the lowest scoring cable companies last year on the American Customer Satisfaction Index.
Complicating matters for customers is the possibility that prices will go up. In most cities, cable is a monopoly with one company providing services for an entire neighborhood, apartment complex, etc. In Miami, multiple apartment complexes have exclusive deals that prevent competitive pricing for residents.
The deal, in the wake of net neutrality being struck down in the courts, also brings up the question of how programming will be impacted by the combination. Comcast owns NBCUniversal and has an economic interest in pushing the content on its litany of channels and websites.
Given the fights recently over carriage agreements between cable companies and networks, it could drive up costs for other networks to a point that it becomes too expensive to get programming on the new cable behemoth.
With net neutrality out, cable companies are also free to set tiers for certain websites to be accessed over high-speed networks. A cable company can legally charge customers more to access Amazon and Netflix than other sites like NBC, USA, etc.
The deal will be under regulatory analysis for all of the issues and more. With the deal just being announced Thursday, no timetable for any possible decision from the government has been released.
The government has gotten mixed results historically if it tries to stop a merger. In 2001, it stopped the merger of United Airlines and U.S. Airways. It stopped the merger of EchoStar-DirecTV in 2002, but lost in trying to stop the Oracle-PeopleSoft merger in 2004.
The government dropped its opposition to the American Airlines-U.S. Airways merger last year.