WGA Chief: Why the Comcast-Time Warner Merger Is Bad for Content (Guest Column)
Chris Keyser contends that the FCC and the Justice Department should block the merger.
The quality and variety of scripted programming now available to viewers has ushered in a new golden age of television. This change has been driven, in large part, by the creative opportunities provided, first by cable and then by online video providers. But the future of these platforms and the ability of writers to create the next groundbreaking series are threatened by the expansion of the nation’s largest and most powerful content distributor.
Just a few years after Comcast became one of the largest television producers and network owners through its acquisition of NBCUniversal, the company has set its sights on Time Warner Cable, the nation’s second-largest cable operator. With this merger Comcast would control 30 percent of the television distribution market and 50 percent of high-speed Internet connections.
It's been a year since Comcast announced its plans to acquire Time Warner Cable, and opposition to the combination continues to grow. Writers Guild of America West recently joined a broad coalition of programmers, distributors, artist organizations and public-interest advocates to prevent approval of this merger because the expansion of Comcast’s monopoly power will harm content creators and consumers.
First, Comcast will use this merger to pay less for programming. As the largest pay TV provider, Comcast pays less to carry television networks than Time Warner Cable, and expects to extend its lower rates across acquired customers. And with the addition of 8 million customers, we can be assured that the merged entity will use its expanded control over distribution to cut rates even further. The problem is that these fees, paid by cable companies to television networks, have helped finance television’s recent creative renaissance. If Comcast has its way, television networks will have less money to invest in programming, which means less creativity, less innovation and less content.
While Comcast claims these savings will benefit consumers, the most likely outcome is higher prices because Comcast’s cable packages are already more costly than its competition. In filings with the Federal Communications Commission, Comcast has claimed it offers more channels in cable bundles at the same or better prices than its major competitors. In reality, the average prices for Comcast’s “Limited Basic,” “Digital Starter,” “Digital Preferred,” and “Digital Premier” cable packages across its 20 largest markets are more expensive than cable packages with similar numbers of channels from competitors including AT&T, DirecTV, Dish, Cox, Verizon and Time Warner Cable. It is unlikely that Comcast would lower prices for consumers once it acquires Time Warner Cable. This is because monopoly power benefits only those who hold it.
The second goal of this merger is to control the future of content distribution. For decades, cable operators controlled consumers’ access to content. Only in the past few years has the Internet made it possible for new choices to emerge outside of the cable bundle. But even in that short time, the Internet has made possible a world where viewers can decide what they want to watch and more diverse stories can be told. The rise of Netflix, Amazon and others as the distributors of original, television-length programming has reintroduced competition for writers’ ideas and viewers’ attention. It is no accident that this merger is occurring in response to Internet video competition, because these services threaten Comcast’s dominance. History has demonstrated that the rise of every new medium that promises to revolutionize communications has been followed by corporate strategies to gain control of that technology. If Comcast is allowed to control half of the high-speed broadband market it will have the power to extinguish the promise of this new platform.
The Federal Communications Commission and the Justice Department should block the Comcast-Time Warner Cable merger. The proposed horizontal expansion constitutes a serious threat to fair competition and freedom of expression. The question raised by this merger is: Should the power of the pipe trump the power to create? The answer should be a resounding no.
Chris Keyser is President of the Writers Guild of America West