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Comcast And Time Warner Monopolies

1046 Words5 Pages

The article I chose to present has to do with monopolies, more specifically the natural monopoly that is formed by the cable companies in the United States.

Summary:

This article is about how the Comcast and Time Warner cable companies were set to merge and Comcast withdrew from the deal due to opposition from the FCC.

Analysis:

First off, we can see from this article that the government has to step in to regulate the monopolies that cable companies hold because without government intervention the companies could charge as high of prices as they want. Not saying they would because even though they have a monopoly, there is still a chance that they would lose customers if the prices are too high.

The services offered by cable …show more content…

He also said that the merger would have “posed unacceptable risk to competition and innovation” and that it would have limited the ability of online video sources to reach their consumers. The most significant part about this to me is that the market is changing. I myself was sick of paying $130 a month for cable and internet so I went to basic cable (it was included for free) and turbo wifi internet for half the price. I also went to HuluPlus and Netflix. It makes me wonder what they mean by limiting the ability of these outlets to reach their consumers. If they restricted my access to these sources then I would maybe be forced to pay more for cable again, I wouldn’t have a choice. Also, Wheeler had talked about the ownership of programming interests. This is a major part of why the merger failed in my opinion. Both companies already own quite a few of the networks that they carry and this is how they can further monopolize the market. Affiliate fees. These are fees that cable companies pay to programming providers on a per subscriber basis for content that they then repackage and sell to consumers. (for more info: http://www.businessinsider.com/heres-how-the-tv-business-actually-works-and-why-its-going-to-take-longer-than-you-think-to-disrupt-it-2010-4) If you own the companies that provide the content as well as being the ones distributing it, then you can lower your variable costs and then also bring in revenue from either charging other companies for the content or you can prevent other companies from having your content available so that if a consumer wants a certain channel they have to subscribe to you to get it. A move like that is what I think that the FCC fears the

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