Comcast Time Warner Cable DISH Network DirectTV AT&T merger

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Satellite TV provider DISH Network urged Federal Communications Commission officials this week to reject the proposed merger of Comcast with Time Warner Cable.

As reported Wednesday in the industry trade, Variety, DISH Network’s opposition was outlined in an FCC filing following a series of meetings between DISH CEO, Charlie Ergen, and FCC chairman, Tom Wheeler. Other DISH execs and four FCC commissioners were also in attendance.

DISH’s filing described the proposed merger as presenting “serious competitive concerns for the broadband and video marketplace.” Three broadband “choke points” were listed where the merged companies could harm competing video services:

The last mile ‘public Internet’ channel to the consumer;
The interconnection point;
And any managed or specialized service channels, which can act as high speed lanes and squeeze the capacity of the public Internet portion of the pipe.

The filing said each choke point “provides the ability for the combined company to foreclose the online video offerings of its competitors.”

DISH also noted that once merged, Comcast/Time Warner would be in a more advantageous position to negotiate lower prices from programmers, who may then be forced to make up differences from smaller providers like DISH.

If the merger is approved, the combined company will have about 30 million cable subscribers.

Comcast argued DISH’s opposition in a statement:

As our filings have shown, every market we operate in is highly competitive. DISH has long been one of our most vigorous competitors, and unlike us has a national footprint available in tens of millions of more homes than a combined Comcast/Time Warner Cable.

The FCC and the Department of Justice both must approve the proposed $45 billion merger.

DISH isn’t without its own merger aspirations. In 2002, federal regulators blocked DISH’s proposed merger with DirecTV. But DISH’s Ergen again approached DirecTV CEO Mike White in March of this year.

Changes in the industry landscape over the last twelve years provide incentive. In 2002, DISH and Direct TV were the most popular alternatives to cable. But now, streaming video services like Netflix, Amazon Video, and Hulu are widespread. Both DISH and Direct are pursuing streaming services that would not require a satellite connection.

But the DISH deal was nixed in early May by a rumored $50 billion DirecTV merger offer from AT&T. Ergen took DISH out of the running, saying he couldn’t match the price.

The combined AT&T/DirecTV would result in 28 million subscribers – slightly less than the merged Comcast/Time Warner.

Ironically, if the Comcast/Time Warner merger is approved, a precedent will have been set for any future similar mergers.