Time Warner Prices: Consumer Groups Worry About Hike If Comcast Deal OK'd

Thursday, 10 Apr 2014 06:50 PM

By Morgan Chilson

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Time Warner and Comcast argued for three hours Wednesday before a Senate Judiciary Committee, seeking approval of a deal to combine Time Warner’s cable assets with Comcast, and consumer groups are questioning whether cable prices would spike should the deal get approval.

Comcast’s Executive Vice President David L. Cohen told Forbes that bigger can be good, and that the company needs to grow to face huge competitors like Apple and Google.

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Cohen said Comcast and Time Warner don’t compete in any market currently, which means a merger wouldn’t change the competition. In fact, he argued, more competition is coming in the industry from DSL.

But 56 groups, including the Consumers Union, MoveOn.org, and the National Organization for Women, sent a letter to government entities this week opposing the merger.

“This merger is a bad deal for consumers that would give Comcast even greater control of the market and little incentive to improve prices or customer service,” said Delara Derakhshani, policy counsel for Consumers Union, in a statement. “It’s no wonder consumers don’t think this merger is in the public’s interest.”

At the hearing, Senate Judiciary Committee Chair Patrick Leahy asked Cohen about the impact on rates.

“There is nothing in this transaction that will make anyone’s bills go up. ... Consumers today are in the driver’s seat,” Cohen answered, Deadline reported. The Comcast VP also discussed programming costs, which he said rose 98 percent in the past 10 years.

Comcast is the largest cable and broadband company, with Time Warner following as the second top cable company and third biggest broadband provider. A merger of the two would give Comcast about 40 percent of broadband customers and two-thirds of cable customers, the Consumers Union said.

It said both companies have consistently ranked low in customer service.

"It bothers us that we have so much trouble delivering a really high-quality service level to our customers on a consistent basis," Cohen said at the hearing, according to The Wall Street Journal, and adding the company was “laser-focused” on working to improve in that area.

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