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Comcast-Time Warner Cable deal would create formidable giant

New Hampshire Union Leader

March 08. 2014 1:07AM
Comcast employs 1,500 people in the Granite State, including at this center on East Industrial Drive in Manchester, while Time Warner employs 880 across Maine and New Hampshire, according to company officials. (Thomas Roy/Union Leader)

With 300,000 customers across southern New Hampshire - from Peterborough to Portsmouth, up to Concord and the Upper Valley - Comcast is already a force to be reckoned with in the Granite State.

With 60,000 customers, Time Warner dominates the market for cable-based video and Internet services in central, southwest and northern New Hampshire.

If regulators approve a proposed merger of the two cable giants, most likely under the Comcast banner, one company will own most of the New Hampshire marketplace for video, high-speed Internet and landline phone service delivered by cable.

That's either a good thing or a bad thing for New Hampshire consumers, depending on who's talking.

Representatives of both companies say customers will benefit from the improved technology and new services the larger company can offer. Opponents of the merger worry about a narrowing of choices for consumers in video content and greater control by Comcast over Internet traffic through fees and pay-to-play deals like the one Comcast recently reached with Netflix.

In what critics call a sign of things to come, Netflix recently agreed to pay Comcast to ensure that Netflix content streams smoothly to Comcast customers, after years of resisting the idea. The deal with Netflix came just 10 days after the pact between the two cable giants was announced.

The good news for Comcast subscribers who also use Netflix is that they will see less buffering and stuttering in their streaming Netflix video. The bad news? They'll most likely have to pay more for it to help Netflix cover the new cost of access to Comcast customers.

The impact of the Netflix deal is just one example of how the possible consequences of the merger are difficult to cast in black and white, rather than shades of grey.

Most consumers don't experience competition for cable service. With few exceptions, cable systems operate as a monopoly through individual agreements with each municipality. At a time when many consumers would like to see more competition in the cable industry, the merger takes them in the opposite direction.

Online petition

More than 10,000 people have signed an online petition to President Obama on the official White House petition website calling on the administration to "Stop the Comcast/TimeWarner Cable merger and require more competition in the cable industry."

The petition claims the merger will reduce choices for millions of consumers for cable TV services and weaken content producers in negotiations for distribution.

"Enough is enough," the petition reads. "In most areas of the U.S. there is virtually no competition for cable services and we're stuck with having to pay for dozens of cable channels that we never will watch in expensive bundles of content . It's time for the U.S. to develop and encourage a better way for us to get access to good TV entertainment."

Although many Americans love their TV as much as they dislike their cable company, the proposed merger hasn't exactly set off a firestorm.

With 10,000 signatures on the White House site, the anti-merger petition has a long way to go toward its target of 100,000 signatures, and is far behind other hot topics like "Pardon Edward Snowdon" (154,000 signatures) or "Declare the Muslim Brotherhood a Terrorist Organization" (200,000 signatures).

Questions about choice

While questions about consumer choice, rising prices and Internet neutrality dominate the national conversation about the merger, each state has its own economic concerns.

Comcast and Time Warner are individually among the largest employers in New Hampshire. Comcast employs 1,500 in the Granite State, while Time Warner employs 880 across Maine and New Hampshire, according to company officials.

Comcast has offices in Concord, Londonderry, Manchester, Nashua and Salem, while Time Warner operates in Keene, Conway, Plymouth, Littleton and Gorham.

Manchester hosts the Comcast Northern Division headquarters, while the Comcast Quality Control Center in Salem, just opened in 2011, employs more than 280 workers engaged in testing hardware for some 2.4 million Comcast customers in five New England states.

The two companies combined provide more than 2,300 jobs in New Hampshire and nearby Maine communities. How many of those jobs will survive and how many local offices will remain open if the merger is approved remains to be seen.

"We expect it to be months before the merger closes, and until that time there won't be any near-term changes to our operations," said Joli Plucknette-Farmen, Northeast public relations manager for Time Warner.

Her peers at Comcast offered a similar reply.

Impact on bills

One beneficiary of the merger in New Hampshire will be small- to medium-sized businesses with locations in the northern and southern parts of the state, or in Massachusetts, according to John Demming, executive director of corporate communications at Comcast.

A business with headquarters in southern New Hampshire and offices in northern parts of the state may now be using two different providers for communication and Internet services. If the merger goes through, all Time Warner Cable and Comcast business customers will be on the same platform.

"With this merger, we would fill in that gap and enable the businesses to communicate between north and south New Hampshire and even into the Boston area," Demming said.

Time Warner Cable customers stand to benefit from new features that Comcast would bring to their cable systems, such as the Xfinity X1 Operating System, a cloud-based guide with on-demand choices, apps for weather, traffic and sports, and integration with Facebook and Pandora.

Big investment

Comcast has promised to invest millions to improve Time Warner Cable's networks, with higher speeds and greater reliability, and will soon be offering cloud-based DVR in the New Hampshire market.

"We have worked with Time Warner on and off in the past on different types of initiatives," said Demming, "and that has built a good foundation."

He said the merged companies will be better able to compete on a national level with other organizations like DirecTV or DISH, as well as the "telecos" like Verizon and AT&T.

Will all those synergies mean lower costs for consumers? Don't count on it. In a conference call with reporters after the merger was announced, Comcast Executive Vice President David L. Cohen was quite candid.

"Impact on customer bills is always hard to quantify," he said. "We're certainly not promising that customer bills are going to go down, or even that they're going to increase less rapidly."

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