Comcast/Time Warner Cable Deal Called Off

Celeblog By: ARG SVP, Heather Campbell

(Graphic by Ed Fischer)

(Graphic by Ed Fischer)

It looks like the Comcast/ Time Warner Cable deal is off.   Last week, the FCC recommended “a hearing”. “Hearing” is really just code for inserting red tape, and extending the timeframes for a deal.   This is big news in the telecommunications world. 

Business customers may look at this several ways.  First of all, it must be said that for businesses, broadband is more important than ever.  As more companies adopt technologies in the cloud, the connection to that cloud becomes your lifeline.  Broadband is a great low-cost option for businesses that understand internet redundancy as the #1 priority.  Not to mention what an easy DR decision it is to make and implement.  

Additionally, for multi-location businesses the whole broadband franchise set up can become annoying, confusing and difficult to manage.  So, score one point for simplifying things a tiny bit for customers with more than one office.   But calling off this deal comes with a big downside.

The big complaint with this particular merger from both commercial customers and consumers is the M-word – Monopoly.  Some people are old enough to remember all the time and effort that went into breaking up AT&T way back in the 80’s.  Then dealing with the ensuing Telecom Act of 1996.  Both monumental events opened the door for competition and in turn, drove costs down.  

In this case, there would be two companies merging that already get plenty of service complaints.  If they joined forces, would service be less reliable at a similar cost?  Probably.  The big complaint from regulators and politicians was focused on politics and power, and less about monopolies.  Today, the internet is largely unregulated – although Net-Neutrality is trying to fix some of that – and the cable companies and other internet providers prefer it that way.  

If Comcast and Time Warner Cable were to merge, they could become a powerhouse and political force to be reckoned with in the regulatory world.  Performance? Unfortunately, they would probably continue to lower the bar for service, much closer to some of their peers with abysmal ratings (whose names shall not be mentioned here).  Everyone knows who they are.

Long story short:  This is off the table for now, but don’t hold your breath.  If these two don’t try again, it will be someone else.  Time Warner Cable is the parent company of Navisite, and that is an attractive entry for most cable companies into the world of cloud.