Time Warner Cable's Merger With Comcast Opposed by Netflix

Tuesday, 22 Apr 2014 07:54 AM

By Michael Mullins

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Time Warner Cable's proposed merger with Comcast is being opposed by Netflix.

The popular video streaming service is the most visible company with ties to Comcast to have voiced their concerns about the proposed $45.3 billion merger between the two largest U.S. cable companies.

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"It's more in the public interest to either not have them merge or if the government goes ahead with it, to at least put some significant merger agreements, settlements in there," Netflix Chief Executive Officer Reed Hastings said in a webcast following the company's quarterly results, Reuters reported.

The primary concern, as Netflix expressed in a recent letter to shareholders, is that through the merger, Comcast would gain "anticompetitive leverage" to charge arbitrary fees on companies that rely on its Internet service.

If the Senate Judiciary Committee gives the merger the green light, the combined company would have 33 million cable subscribers and nearly as many broadband users, The Washington Post reported.

Among lawmakers, Minnesota Democratic Senator Al Franken is one of the most apprehensive when it comes to how the merger would impact the U.S. media. In a letter to regulators earlier this month, Franken expressed his concerns over the merger.

"My concern is that as Comcast continues to get bigger, it will have even more power to exercise its leverage and squeeze consumers," Franken wrote.

"I'm against this deal," Franken added during a subsequent hearing. "I believe this deal will result in fewer choices, higher prices, and even worse service for my constituents."

On Monday, the Netflix executive told Reuters that he favors the federal government imposing "some enduring form of no-fee interconnect" if the merger is approved by regulators.

In response to Netflix's opposition, Comcast responded with an immediate statement.

"Netflix's opposition to our Time Warner Cable transaction is based on inaccurate claims and arguments," the cable operator said. "There has been no company that has had a stronger commitment to openness of the Internet than Comcast."

Over the coming months, the Justice Department and the U.S. Federal Communications Commission will likely review the merger's impact on competition, with a particular focus on antitrust and public interest concerns.

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