Crony Capitalist Chronicles: Comcast wants to gobble up Time Warner Cable
One of the Obama administration's best corporate friends wants to buy its biggest competitor, using stock. Ryan Nakashima of AP:
Comcast Corp. will buy Time Warner Cable Inc. for about $45.2 billion in a deal that combines the nation's top two cable TV companies and would create a dominant force in both creating and delivering entertainment to U.S. homes.
The all-stock deal was approved by the boards of both companies. It is expected to close by the end of the year, pending shareholder and regulatory approvals.
The prospective merger is so anti-competitive that Peter Weber of The Week avers:
The deal isn't going to happen. Not in any recognizable form. (snip)
"Let's get to the bottom line," says Michael Hiltzik at the Los Angeles Times. "There's no way this combination can conceivably be in the public interest." The only real question on the table is "whether the FCC will fold against the economic and political power of these two behemoths."
I wish I could agree with Weber, but crony capitalism is a powerful force, and Comcast has a lot of chips to cash in when it comes to the Obama administration, whose motto is help your friends and punish your enemies. Comcast owns NBC and MSNBC, the two biggest media friends of the Obama administration, whose efforts to shore up the Democrats often verge on the comic.
Defenders of the merger claim that because the cable TV operations of the two companies are in distinct geographical areas, there is no anti-competitive effect. But that is nonsense. The real game is in content control, and the ability to shape access to broadband. Comcast's already huge bargaining advantage over cable content providers will be enhanced by controlling a much larger share of viewership. It will be able to demand that Fox News Channel - to select a perfectly random example - accept reduced compensation per viewer in return for access to viewers on Comcast.
Even worse is the looming battle over the Orwellian-titled "Net Neutrality" proposed regulations that would allow Comcast to slow down access to Netflix content (which competes with Comcast cable offerings).
At stake is nothing less than control over the primary information channel reaching American homes.
The Obama administration and Democratic Party would love nothing more than the ability to strangle their opposition through control of the information superhighway.
This merger is an abomination. But don't expect Republicans. While Comcast gives the majority of its employees' political contributions to Demcorats, the two biggest single recipients, 2013-14: John Beohner and Mitch McConnell.