Comcast-Time Warner Cable merger sucks for consumers

Comcast Corp. has made it public that it has agreed to acquire Time Warner Cable Inc. for around $45.2 billion in stock, or $158.82 per share, in a deal that would join the countries top two cable TV companies.

The merger will make Comcast a huge force in the market in terms of both creating and delivering entertainment into American homes. The merger was approved by the boards of both companies and is expected to be finished by the end of the year.

The deal comes after Time Warner Cable just turned down a $60bn bid from Charter Communications last month. The merger will most likely face scrutiny from US regulators, but probably not enough to stop the deal from going through.

Comcast already has 22 million subscribers, while Time Warner Cable has 11 million. The new company will have more than 30 million subscribers when the merger is finished. Comcast is arguing that because Time Warner Cable serve different markets, the merger will not reduce competition for consumers.

Comcast is centered mainly in the northeast. Its bigger markets are Philadelphia, Boston, Washington and Chicago. Time Warner Cable is centered around New York, Los Angeles, Dallas and Milwaukee.

In many areas, the cable company will face competition from AT&T and Verizon.

The merger would give Comcast unprecedented gatekeeper power in several markets, turning it into the bully in the schoolyard and enabling it to put the squeeze on content companies.

The biggest winners will of course be the US consumer who will face higher prices, weak Wi-Fi signals and slow data speeds. Sounds like a win-win situation. No?

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