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Comcast Planning National Streaming Service, Merger Critics Say

Perhaps Comcast's biggest justification for approval of their deal with Time Warner Cable is the fact that the two companies don't directly compete. One group fighting the merger claims that isn't entirely the case. Bloomberg reports that The California Office of Ratepayer Advocates has found evidence in government filings of a planned nationwide Comcast streaming service that technically would compete with Time Warner Cable in its footprint.

As such, the group claims, Comcast's deal would (in addition to other proposed leverage harms) hinder competition in the TV space. Comcast denies that any plans are underway:

quote:
Finding the documents is “an important and critical development” that shows Time Warner Cable and Comcast “must be considered as direct potential, if not actual, competitors,” the Office of Ratepayer Advocates said...A Comcast spokeswoman, Sena Fitzmaurice, referred to the company’s March 9 filing at the Federal Communications Commission that said the company has reviewed the prospects for such a service and “has consistently rejected its business viability."
Usually a company just won't comment if there's some legitimacy to a planned service claim, so Comcast's outright denial is notable. Comcast's also repeatedly made it clear they're wary of such an offering, because it might cannibalize the company's traditional cable base. The company's previous effort to offer something comparable to Netflix -- Streampix -- didn't see much interest, though that was offered to Comcast TV subscribers and not as a stand alone product.

Should such a service be in the works, it would help explain why reports this week suggested Comcast was playing hard to get in negotiations with Apple over a planned Apple streaming TV service. Either way, most critics argue the biggest impact of a larger Comcast isn't the direct reduction of broadband and TV competition, its the greater leverage an even larger Comcast will have over video content licensing and ad markets.
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HereToHelp
@charter.com

HereToHelp

Anon

Not a valid point

OK first a Comcast streaming service would NOT be competition to TWC. If it is then Sling TV, Sony's TV thing an Apple TV are "competition". Also all TWC would have to do to blunt that is install a cap than BAM no more "competition". I'm sure consumer advocates would love that. Also logically if it WAS competition then it's cheaper to just get TWC customers to switch their cable tv to Comcast streaming than it is to buy out TWC.

TechyDad
Premium Member
join:2001-07-13
USA

2 recommendations

TechyDad

Premium Member

Re: Not a valid point

A Comcast streaming service would be a competition to TWC since you could cancel Time Warner Cable TV service and sign up for Comcast streaming TV service. TWC offers streaming TV service if you've signed up for their cable TV service. It's not a big leap to imagine them offering this as an "IP TV" offering to sign up customers in other areas.

The biggest reason why the cable companies won't readily offer IP TV services (besides eroding traditional cable TV revenue) is that they would then be competing against each other. They've carefully divided up the country so that they don't compete at all. The last thing they want is to have competition driving prices down.

Caps are a method to deter streaming. There is no other reason to impose a 350GB cap than to stop people from streaming videos all day instead of watching cable TV all day. The more people stream, the more they realize they don't need cable TV and the less likely that money will keep flowing to the cable companies via TV subscriptions. So the cable companies impose caps and use their ISP monopolies to protect their TV service revenue.

Finally, if Comcast competes against TWC, they would switch some people over but TWC would be likely to release a similar service and grab Comcast customers. Then, as mentioned above, they'd have competition driving prices down and quality up. Much better (in Comcast's mind) to buy TWC entirely. They get ALL of the TWC customers, don't lose any of their own, and keep competition minimal. (Bonus: The larger they get, the more they can leverage their monopoly ISP business to keep TV competition down.)

HereToHelp
@charter.com

HereToHelp

Anon

Re: Not a valid point

said by TechyDad:

A Comcast streaming service would be a competition to TWC since you could cancel Time Warner Cable TV service and sign up for Comcast streaming TV service.

Caps are a method to deter streaming. There is no other reason to impose a 350GB cap than to stop people from streaming videos all day instead of watching cable TV all day. The more people stream, the more they realize they don't need cable TV and the less likely that money will keep flowing to the cable companies via TV subscriptions. So the cable companies impose caps and use their ISP monopolies to protect their TV service revenue.

How are these both true? If TWC established a cap then it would prevent this streaming service from being a true competitor. You can't state a streaming service is a competitor then say caps prevent streaming services from being competitors.

TechyDad
Premium Member
join:2001-07-13
USA

TechyDad

Premium Member

Re: Not a valid point

said by HereToHelp :

How are these both true? If TWC established a cap then it would prevent this streaming service from being a true competitor. You can't state a streaming service is a competitor then say caps prevent streaming services from being competitors.

Caps don't prevent streaming services from being competitors to cable TV. Instead, caps are a cable company's method of using their monopoly (or near-monopoly) on Internet service to hurt their competition in video services. Just like a cable company making Internet alone cost more than their Internet+TV bundle (but not making the TV alone bundle cost more than Internet+TV) doesn't remove Internet only as an option, but uses trickery to prevent people from being counted as cord cutters. (You might sign up for Internet+TV to save money and put the cable box away in your closet, but you'd be still counted as a cable TV subscriber.)

To give another example, years ago Microsoft got in trouble for using their Windows near-monopoly to promote their Internet Explorer browser. Apple computers were much a smaller market then and smartphones hadn't taken off yet. If you wanted a computer, chances are it was going to come with Windows on it. And if a computer manufacturer wanted to put Windows on their computer, they couldn't have any browser other than Internet Explorer installed. This didn't prevent other browsers from competing with Internet Explorer, but it did mean that getting a browser became much harder (especially over dial-up modems of the time).

A cap doesn't stop competition, but it raises an artificial barrier - using a monopoly position - to limit the competition's impact.

OpTiC
Premium Member
join:2014-03-08
West Covina, CA

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OpTiC to HereToHelp

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to HereToHelp
Yes it is it will compete with TWC with TV because it can take away customers from TWC TV service to Comcast

HereToHelp
@charter.com

HereToHelp

Anon

Re: Not a valid point

said by OpTiC :

Yes it is it will compete with TWC with TV because it can take away customers from TWC TV service to Comcast

Except when TWC puts in a low cap to blunt this service. You don't seriously think TWC wouldn't do something to prevent TV customers from switching to such a service and use TWC internet to do it? That's extremely naïve.

OpTiC
Premium Member
join:2014-03-08
West Covina, CA

OpTiC

Premium Member

Re: Not a valid point

said by HereToHelp :

said by OpTiC :

Yes it is it will compete with TWC with TV because it can take away customers from TWC TV service to Comcast

Except when TWC puts in a low cap to blunt this service. You don't seriously think TWC wouldn't do something to prevent TV customers from switching to such a service and use TWC internet to do it? That's extremely naïve.

Not true TWC is Unlimited. I have their services and I know. TWC has a plan for $8 less and that will give you capped data.

TechyDad
Premium Member
join:2001-07-13
USA

TechyDad

Premium Member

Re: Not a valid point

To be fair, TWC wanted to cap their service. Awhile back, they trialed a 5GB limit with overage fees. No, that's not a typo. 5 gigabytes a month. They got such a bad reaction from that trial that they backed off and, after the heat died down, re-branded the idea as "we'll give you a pittance off your bill if you agree to this tiny cap with overage fees... but it's completely voluntary (for now)."

OpTiC
Premium Member
join:2014-03-08
West Covina, CA

OpTiC

Premium Member

Re: Not a valid point

Actually they wanted to give customers a option 5gb or 30gb for less. TWC tried to cap people in 2008 but failed. TWC expressed that they want to find a way to keep unlimited lately.

TechyDad
Premium Member
join:2001-07-13
USA

TechyDad

Premium Member

Re: Not a valid point

I looked up some old articles on the subject and you're right that it was more than just a 5GB cap: »www.cnet.com/news/time-w ··· net-use/

However, the biggest cap they wanted to offer was 40GB. Initially, the plan wasn't going to be to have the caps be optional. You'd choose a plan from a 5GB cap to a 40GB one and then you'd pay overage fees if you went over your cap. People did NOT like this and even some politicians began to speak up. At this point, Time Warner Cable backed off, waited a bit, and then came out with the "save money by agreeing to a cap" plan.

Since I have Time Warner Cable (and recently cut the cord), I'm glad that TWC wants to keep unlimited. (Especially since I have NO other option for wired, broadband Internet.) I'm not a fan of caps at all and hope they don't institute them. As streaming cuts into TV revenues, though, I fear that they'll see caps as a method of bolstering TV revenues and holding streaming back.

OpTiC
Premium Member
join:2014-03-08
West Covina, CA

OpTiC

Premium Member

Re: Not a valid point

said by TechyDad:

I looked up some old articles on the subject and you're right that it was more than just a 5GB cap: »www.cnet.com/news/time-w ··· net-use/

However, the biggest cap they wanted to offer was 40GB. Initially, the plan wasn't going to be to have the caps be optional. You'd choose a plan from a 5GB cap to a 40GB one and then you'd pay overage fees if you went over your cap. People did NOT like this and even some politicians began to speak up. At this point, Time Warner Cable backed off, waited a bit, and then came out with the "save money by agreeing to a cap" plan.

Since I have Time Warner Cable (and recently cut the cord), I'm glad that TWC wants to keep unlimited. (Especially since I have NO other option for wired, broadband Internet.) I'm not a fan of caps at all and hope they don't institute them. As streaming cuts into TV revenues, though, I fear that they'll see caps as a method of bolstering TV revenues and holding streaming back.

Actually it was depending on the plan.
smk11
join:2014-11-12

smk11 to HereToHelp

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to HereToHelp
said by HereToHelp :

OK first a Comcast streaming service would NOT be competition to TWC. If it is then Sling TV, Sony's TV thing an Apple TV are "competition". Also all TWC would have to do to blunt that is install a cap than BAM no more "competition". I'm sure consumer advocates would love that. Also logically if it WAS competition then it's cheaper to just get TWC customers to switch their cable tv to Comcast streaming than it is to buy out TWC.

Seriously, how much are you getting paid for the pro-ISP trolling?

A national service would compete. TWC launches a national service. Comcast launches a national service. If they both merge, competition is reduced.

HereToHelp
@charter.com

HereToHelp

Anon

Re: Not a valid point

said by smk11:

[
Seriously, how much are you getting paid for the pro-ISP trolling?

mods?
westdc
join:2009-01-25
Amissville, VA

westdc

Member

Would that Service

Count against my Comcast Cap? if not then let them merg and then raise my internet connection cost to $200 a month without caps-LOL!

That is the real plan - Drop Cable and the saving will be passed on to the consumer - by Sub service -(hbo) (netflix) and the likes and then raise the Total internet connection fee on top - WIN _WIN for the cable tv company's

annonnymiss
@comcast.net

annonnymiss

Anon

Re: Would that Service

This is how it always works when the Government regulates industry.

They will always find a way to make up the money they lose through regulation. Always.

And the government can't write regulations that cause corporations losses, that would go over like a lead brick, and probably be illegal.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Merger Critics...

Comcast, "playing hard to get", or was it Apple, unwilling to pay?
That's kind of ironic, considering the markups they assess on their flock.

When did Comcast ever claim Streampix was equivalent to Netflix?

telcodad
MVM
join:2011-09-16
Lincroft, NJ

telcodad

MVM

Re: Merger Critics...

said by elray:

When did Comcast ever claim Streampix was equivalent to Netflix?

Well, maybe not "equivalent," but an (indirect) competitor to Netflix:

Despite subscriber count, Comcast still posted revenue of $5.18 billion in Q1, nearly five times that of Netflix
By Todd Spangler, Variety - April 30, 2014
»variety.com/2014/biz/new ··· 1168115/
quote:
Comcast continues to paint Netflix as a competitor, as the cable giant keeps trying to make the case that it needs to swallow Time Warner Cable to have a presence on a national scale — and compete with what it portrays as surging digital-video rivals.

Comcast chairman-CEO Brian Roberts, speaking on a panel at the Cable Show, said that with the TW Cable acquisition and subsequent spinoff of systems to Charter Communications, Comcast will add a net 7 million customers. That would give Comcast about 30 million video subscribers — and Roberts noted that Netflix now has more than 35 million U.S. subscribers.

The merger will give “the industry a better opportunity to have a footprint regionally and hopefully nationally,” Roberts said.

In reality, Comcast and Netflix aren’t really directly competitive: They offer different kinds of content, and Netflix is not a replacement for the broad programming available on pay TV. Comcast does offer a Netflix-like streaming service, Streampix, but that’s bundled with TV and has a much smaller content lineup.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Re: Merger Critics...

That's a Variety reporter, not Comcast, claiming that Streampix is Netflix-like.

It wasn't, and they never said it was, did they?
dfxmatt
join:2007-08-21
Crystal Lake, IL

1 recommendation

dfxmatt

Member

Re: Merger Critics...

Streampix isn't even close to netflix, mostly due to comcast's terrible service offerings.
96964493 (banned)
join:2015-01-09
USA

96964493 (banned) to elray

Member

to elray
Apple probably not wanting to pay.

Leverage
@comcast.net

Leverage

Anon

Leverage over content companies a good thing

If the merger of Comcast and TWC increased leverage over content companies, that would be a good thing since it is the content companies that are the major cause of increased TV costs.
smk11
join:2014-11-12

smk11

Member

Re: Leverage over content companies a good thing

said by Leverage :

If the merger of Comcast and TWC increased leverage over content companies, that would be a good thing since it is the content companies that are the major cause of increased TV costs.

What the hell do you think Comcast and TWC are? Two content companies that also offer internet service are going to merge. Prices aren't going to go down.

Block the merger.
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

primary goal of getting bigger

the primary goal to get bigger is to commoditize broadband and collude with telcos on metered broadband ambitions similar to what we see in cellular data plans (it helps to be 70% of the ISP market place to make that a reality)-- and google / regulators not going to run to your rescue any time soon. not only does this give a huge return on investments is has the shared goal of grabbing money from pirates and others who don't want to pay the higher and higher costs of video content. the subscription model without streaming is bound to see double digit declines in people willing to pay higher and higher fees. it is a reality that consumers have streaming/downloading choices including fee'd and piracy. just let them get their greedy little hands on pricing models like this one: 250gb caps and $10 50gb overages under docsis 3.1 deployments even with high tiered throughputs of $50, $75 and $150 plus any other gouging fees they can tack on.

there is NO consumer benefit of Comcast swallowing up another cable company and being the nation's LARGEST ISP similar to what AOL was in the dialup days (to be sure there were competitors and free isps back in the day-- but in terms of % of the marketplace of the subscription model for its time-- aol killed it in terms of market share)