In an ideal world capitalism would create wealth for everyone and be a great finfcial model for a country to improve the lives of its citizens. However we don’t live in the ideal world, we live in the real one. Too often unfettered capitalism creates winners and losers and the gap between the two is getting wider. This in an email I received from President Robert D. Marcus Chairman and Chief Executive Officer of Time Warner Cable regarding the merger with Comcast.
“Above all, this merger will benefit you, our customers. Our two companies have been behind many of the innovative services that you enjoy every day—digital cable TV, high-speed Internet, DVRs, Video On Demand and WiFi in the home and on-the-go—to name just a few. The combined company will innovate faster and deploy even better products and features, including a superior video guide, faster Broadband Internet speeds and even more WiFi access points so you can access the Internet wherever you go.”
If the TWO companies were responsible for all of this innovation, why not leave them alone? In fact, these technical advancements came as a result of the competition between the TWO. A merger will only lead to less innovation and higher prices for the consumer as the choices for quality cable entertainment become less and less.
This is an example of why non-regulated capitalism leads to corporate profit growth and personal stagnation.
While there are some who feel the merger will benefit customers, most do not. Forbes says,
“…the deal will make video programming delivery even less responsive to legitimate consumer interests. The reason is that a vertically integrated company such as Comcast stifles the highly beneficial and naturally occurring competition between distributors and programmers. This vertical competition, often ignored or undervalued by economists and enforcers, is vital to ensuring that the system remains competitive.”
Others argue the deal does not even follow the government’s own guidelines for approving a merger. New York Magazine states the following,
“Basically, what all this complicated math boils down to is this: If the government evaluates the Comcast bid for Time Warner Cable using the same standards it used on the AT&T—T-Mobile deal, there’s simply no way the merger should be allowed to happen.”
This is from the lawsuit against the AT&T T-Mobile merger.
“AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market Thus, unless this acquisition is enjoined, customers of mobile wireless telecommunications services likely will face higher prices, less product variety and innovation, and poorer quality services due to reduced incentives to invest than would exist absent the merger.”
If this was the government’s position on the AT&T and T-Mobile merger what has changed in this merger attempt. The answer is the stakes are higher because Time Warner and Comcast are the two biggest providers in the market.
The evidence shows that this deal is bad for consumer pricing, competition, innovation, service, and violates the governments own antitrust laws. The only people who benefit from this merger are the people who stand to directly reap financial gain by merging the two companies. Stand up and say “NO” to the Time Warner and Comcast merger.