WGA Unveils Case Against Comcast Acquisition of Time Warner Cable

Brian Roberts Comcast CEO - H 2014
AP Photo/Susan Walsh

At a press event, a group of experts called for the acquisition to be blocked because it would take away funds that have fueled a creative explosion in television.

On Wednesday, the Writers Guild of America West backed up its call to halt Comcast's acquisition of Time Warner Cable with research and rhetoric listing reasons why it would be a bad idea. The reasons include charges that Comcast will use the leverage gained by growing bigger to pay less for programming, taking away funds that have helped finance TV’s recent creative renaissance.

“The proposed horizontal expansion constitutes a serious threat to fair competition and freedom of expression,” said WGAW president Christopher Keyser. “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.”

While Comcast has said the savings they gain will benefit consumers, the WGAW charges that it will mean higher prices for consumers. “Comcast packages are already more costly than its competition,” said Keyser.

Keyser said Comcast’s goal is “to control the future of content distribution.”

In particular, the opponents say the deal will give Comcast too much power over broadband services. “If Comcast is allowed to control half of the high-speed broadband market,” said Keyser, “it will have the power to extinguish the promise of this new platform.”

“Los Angeles will be the hardest hit, in the center of the entertainment industry,” said U.S. Representative Tony Cardenas in an opening keynote at the event, arguing that the acquisition will mean higher prices and less diversity.

Cardenas said after the merger Comcast would control 90 percent of all Hispanic homes, as well as 30 percent of all American cable TV homes.

The Congressman cited a current dispute between Estrella TV (Spanish language) and Comcast over carriage as an example of the problem. Cardenas charged that Comcast is trying to hurt Estrella because it competes with Telemundo, which is owned by Comcast/NBCUniversal.

Cardenas said he has written to the FCC and FTC calling for them to block the acquisition. He said he told them this “is not just about Spanish networks,” adding that if the deal goes through, many other networks “could face this type of contract dispute with a massive Comcast that not only owns the set-top boxes they come through but competitors as well.”

If the Comcast acquisition is approved, Cardenas said that a number of conditions should be imposed to “close the digital divide.” He means that those in economically depressed areas need to have the same access to broadband as those in more affluent areas.

Cardenas said this merger “truly will affect the makeup and content of what America watches in the future,” adding that he believes Comcast will not have “the public in mind every time they make their decisions” in the years ahead.

Paul Goodman of The Greenlining Institute echoed those who said that the acquisition will hurt Hispanics and consumers of color who, he worries, will not have the same access to economic opportunity (meaning the use of broadband) as others who are more affluent.

Arturo Camona of Presente.org added that the deal would actually be “dangerous” for Hispanics, noting that a combined Comcast and TWC would control 19 of the top 20 markets where there is a significant Hispanic population.

Camona said the big issue for minorities is “affordability.” He predicted the deal will lead to higher prices not just for video but also for broadband.

“What we need,” said Camona, “is competition not consolidation.”

Walter F. Ulloa, of the Spanish-language service Entravision, predicted the deal, if approved, would give Comcast “unprecedented control,” adding that the result would be Latino programmers having no choice but to accept whatever demands Comcast makes. “It will ultimately diminish the quality, quantity and competiveness of the market,” he predicted.

David Goodfriend of the Sports Fan Coalition began his remarks by congratulating Ulloa on his “courage” in coming forward because “a company like Comcast plays for keeps.” He said Comcast in the past has shown that it will seek “retribution” by limiting channels and raising their costs.

Goodfriend showed a map of Southern California which laid out how much territory Comcast would control if the deal gets done. It would not only take over areas now served by Time Warner Cable but also those like Malibu that are served by Charter, as part of a larger deal among the three companies.

Goodfriend noted that 70 percent of those in Southern California already can’t watch Dodgers games regularly because of a stalemate between TWC and other providers. He predicted if the Comcast deal is done, that will only get worse.

“Sports is sort of like the canary in the coal mine,” said Goodfriend, adding that there is “already evidence these companies are bad actors when it comes to sports and it is only going to get worse with this merger.”

Keyser added that overall the deal would be “bad news for the entertainment industry and the writers I represent.” He predicted Comcast would use its power to pay less for content and limit broadband connections, as it did with Netflix. “That will mean less investment in content.

“The harms of this merger,” added Keyser, “outweigh any benefits the company may claim.”

It was noted that a staff member of the California Public Utilities Commission has recommended approval of the Comcast-TWC deal, with some conditions.

A PUC representative at the event said they estimate if the deal is done Comcast will control 82 percent of the video and broadband business in California.

Goodfriend said Comcast is even balking at those conditions, such as guaranteeing lifeline service, cable and broadband in all areas they serve. He called on the entertainment industry and consumers to contact the California PUC and their elected representatives and make their views on the deal known.

Goodfriend said it is his reading of the process so far — by the FCC, FTC and Department of Justice — that the deal will depend not just on whether it may be harmful, but also how it will impact future opportunities, especially for those using broadband.

After the WGAW press conference on Wednesday, Sena Fitzmaurice, spokesperson for Comcast, responded to comments by Cardenas and others. What follows is an edited version of that response:

“The Comcast-Time Warner Cable transaction has undisputed benefits for consumers – including faster Internet speeds, better video products, broadband programs for low-income Americans, more competition for small businesses, and better diversity practices, including more diverse programming for consumers. 

“We’re proud of the support we’ve received for the transaction from the Hispanic community, both from programmers and from national and local groups representing the community. Comcast is the nation’s largest provider of Latino and multicultural television packages, with a distribution platform that delivers more than 60 Latino networks in both Spanish and English.”  

“With regard to Estrella TV, Comcast already distributes Estrella TV programming broadly – in fact, we are Estrella’s largest distributor.  We have been negotiating in good faith for months with Liberman Broadcasting to continue carrying its broadcast signals in the only three markets where our distribution arrangements with Estrella are ending, markets that represent only 20 percent of our total Estrella distribution.  Most importantly, Comcast is not dropping Estrella – it is Estrella that has decided to pull its signal from Comcast customers.”

“We do not believe Comcast’s customers should have to pay millions of dollars for Estrella’s broadcast programming that has very limited appeal.  Contrary to Estrella’s assertions, these stations are not widely viewed among Latino audiences.”

2 pm, Feb. 18 Updated with response from Comcast