If University students thought their cable and internet service through Comcast was bad before with e-mail inaccessibility and crashing systems, they better had prepare themselves for even worse troubles in the future due to the recent acquisition of AT&T Broadband by Comcast Corp. last week. The deal quickly took place after being approved by the Federal Communications Commission by a vote of 3-1. This merger of the largest and third largest cable networks has great potential for abuse.
The Federal Communications Commission approved the merger on the grounds that it “will have a positive impact on the development of broadband services” because it is likely to “spur new investment and to create synergies and efficiencies that will result in significant cost savings.” The merger was permitted on the condition that Comcast and AT&T divest themselves from any interest in Time Warner Entertainment within five and a half years to prevent possible collusion among the country’s three largest media conglomerates.Nonetheless, any potential benefits are uncertain, the precautions are insubstantial and the threat of a monopoly is too great for the merger to be justified.
The possibility of better customer service that the corporations and the FCC use to justify the merger is misleading at best. It is true that the new combined AT&T Comcast is likely to be more economically efficient. However, AT&T and Comcast themselves concede that the price of cable service will not go down in the future, but rather increase less. Furthermore, the modernization and upgrade of AT&T broadband deployment could be better achieved through competition in the marketplace rather than by conglomeration and a resulting $30 billion debt.
The FCC underestimated the potential for abuse resulting from the merger, which led them to refrain from mandating adequate precautions. For example, the FCC notes that AT&T Comcast will have the motivation and ability to secure exclusive programming contracts that could hurt competition. However, no conditions were imposed on the grounds that the corporations already have the ability to do so individually. In addition, the Order recognizes that both AT&T and Comcast have engaged in suspicious marketing tactics such as targeted discounts that are anti-competitive and hurt consumers as a result.
The one condition that the FCC did impose, divestment from Time Warner, is insufficient. Although it will prevent AT&T Comcast from engaging in anti-competitive activities with that specific corporation, there are no conditions in place to prohibit the investment in other programming interests in the future that are just as likely to injure marketplace competition.