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 In a 175-page filing with the Federal Communications Commission that
kicks off the FCC's review of the deal, Comcast argues that combined
with Time Warner Cable, it will compete with an "array of
sophisticated companies with national or even global footprints"
such as Google, Netflix Inc or Verizon that have gained ground
against Comcast.
"In the evolving video marketplace in which these companies have
thrived, there is no reason why a cable company should be limited in
evolving as well," Comcast's filing said.
"Over the last few years, our competitors have evolved into being
much larger companies by revenue, by cash flow and or by customers
than we are to all have a larger geographic scope than we have,"
Comcast Executive Vice President David Cohen told reporters after
the filing was made public on Tuesday.
If approved by the Justice Department and the FCC, the merger would
result in a company that would serve just under 30 percent of the
U.S. pay television video market, after Comcast's plan to divest 3
million subscribers.
The merged provider would also serve between 20 percent and 40
percent of U.S. broadband subscribers, depending on whether wireless
broadband offered by telecom companies is included, Comcast said.
Opponents have raised concerns that the sheer size of the merged
company would give it too much control over what Americans can watch
on television and do online as Comcast boosts its power as a buyer
of web and pay-TV content.
"The great equalizer is that for many of those companies, they don't
own the network in the high-speed video marketplace," said Chris
Lewis, vice president for government affairs at consumer interest
group Public Knowledge, referring to Google, Apple, Netflix and
other content providers Comcast cited as its growing competitors.
Cohen and Time Warner Cable's finance chief Arthur Minson are
expected to hear about these concerns when they testify at the
Senate Judiciary Committee on Wednesday.
A Reuters/Ipsos online poll last month found a majority of Americans
skeptical about the proposed merger, with 52 percent of the 1,368
surveyed people saying that mergers such as the Comcast-Time Warner
Cable deal result in less competition and are bad for consumers.
Comcast shares on Tuesday traded at their lowest level since the
Time Warner deal was announced in February, a four-month low of
$48.24 per share, and were 0.3 percent lower in the session.
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BROADBAND COMPETITION
Since announcing its bid, Comcast has underscored that the merger
combines two companies that do not directly compete in any markets,
meaning no consumer would lose a choice of an Internet or cable
provider. It has argued that Time Warner Cable's customers would see
a boost in quality of their services and the speed of their
Internet.
However, while lack of direct competition does away with major
antitrust concerns that could trigger a block from the Justice
Department, the FCC gets much broader leeway in examining whether
the deal is in the public interest.
Cohen said in more than 98 percent of the broadband markets served
by Comcast and Time Warner Cable, customers have another Internet
service choice offered by a top-ten telecom provider, delivered
through fiber or new-generation DSL, plus newer entrants such as
Google Fiber.
Comcast also made the case that its sales of service including
broadband to small and large businesses could present companies with
an alternative to telecom providers such as Verizon and AT&T.
The company also reaffirmed its commitment to so-called network
neutrality rules, which ban Internet providers from slowing down or
blocking access to content online, and that have been struck down by
a court as formal FCC rules in January.
Comcast, thanks to a condition placed on its 2011 merger with NBC
Universal, is now the only company bound to uphold net neutrality
for the next five years and has promised to apply it post-merger
when it becomes larger.
The FCC is now reviewing how to rewrite the net neutrality and the
treatment of Web traffic, including the fees content companies pay
Internet service providers in so-called interconnection deals, is
likely to be part of the agency's review of the merger.
(Editing by Andrew Hay, Bernard Orr)
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