Opponents of the Comcast-Time Warner Cable merger sure can hype.
First, critics are hyperventilating that the combination would be too big and powerful.
Columnist Paul Krugman gasps that Comcast is “gigantic,” Time Warner Cable is “huge,” and that the merged company would “be an overwhelmingly dominant player.”
Well, a merged Comcast would still have one-fifth the revenues of either “gigantic” Exxon or Walmart. Its business would be roughly half that of Apple, General Motors or General Electric.
And a merged Comcast would still be a third smaller by revenue than each of Comcast’s two largest direct competitors AT&T or Verizon.
Overall, about thirty American companies would each be larger than a merged Comcast by revenues, including five in health care, five in financial services, four in energy, three in tech, and two in communications.
As for being “overwhelmingly dominant,” any consumer that watches TV, listens to the radio or reads their mail knows from the constant bombardment of advertising from their communications business that they can take their video, broadband, or phone business to different competitors.
Second, critics are too hyper-critical of the merger’s effect on competition and the overall state of America’s communications competition.
The facts show that Comcast and Time Warner Cable are not competitors, so this merger will not eliminate a competitor in any market. Any fair review of the competitive facts shows that America has the most robustly-competitive facilities-based communications market in the world.
Moreover, the innovations of smart phones, tablets, WiFi, and LTE have revolutionized the way people view video and use broadband. For example, America’s world-leading 100 million LTE subscribers now enjoy better than video streaming speeds almost anywhere they go.
With the advent of wireless LTE video/broadband competitive substitution, the combined shares of Comcast-Time Warner Cable actually would be lower than the much-discussed high-end of 30 percent shares that are overstated without including LTE broadband competitors.
One can’t believe over-the-top (OTT) video competition is the future and important today, and also ignore that consumer wireless viewing is where much of OTT video is going.
LTE facility innovation is just one way the American communications market becomes increasingly competitive, and also leads the world in facilities-based competition.
Third, many critics are engaging in hyperbole, positing extreme problems they know, or should know, that current or offered merger conditions already address.
What is most unusual about this merger is that most all of the potential feared problems with this combination are already mitigated in the form of DOJ/FCC conditions on the 2011 Comcast-NBCU merger, because Comcast has committed to extend them to Time Warner Cable through 2018.
In addition, the company has preemptively addressed other potential feared concerns, which proves that the company understands its critics’ potential concerns and is proactively committing to reasonably resolving them in a reasonable time frame.
Finally, many critics are hypocritical, holding old media to cross-ownership and market share standards to which they do not hold new media at all.
The leading critics of this Comcast-Time Warner Cable merger, Free Press and Public Knowledge, are also longtime critics of old media local and regional concentration. Interestingly, they both have been largely silent on new media’s extreme national and international media concentration among edge companies.
They have long pushed for FCC media ownership rules to limit newspaper-broadcast cross-ownership in a local market and national 30 percent ownership limits for cable and radio. Tellingly, the D.C. Court of Appeals twice rejected these backward-looking FCC limits. An important fact here is that Congress raised the ownership limit for the national reach of TV broadcasts to 39 percent in 2004.
Now when confronted with a merger where Comcast preemptively offers to abide by FCC limits that are not legal, in order to assuage their potential media ownership concentration concerns these critics remain hyper-opposed.
However, if these critics were truly concerned about the effect of corporate media concentration on America’s democracy, Americans’ free speech, and localism, why have these old media concentration crusaders been totally silent on the extreme concentration that has occurred with new media at the edge?
New media players Google-YouTube, Facebook and Twitter, dominate their new media markets nationally in ways unimaginable for old media.
To make this point, let’s consider just Google-YouTube’s dominance of new media video. YouTube now has over one billion viewers viewing six billion hours of video each month. It claims to reach more of the prime 18-34 adult segment of Americans than any U.S. cable network. And it boasts thousands of channels making six figures a year.
Relative to their nearest Internet video competitor, YouTube commands 21 times more U.S. videos viewed and 17 times more U.S. unique video viewers, per comScore.
That means Google-YouTube likely reaches roughly 80 percent of Americans, or more than two and a half times more of the national market than the combined Comcast-Time Warner Cable merger would reach.
And don’t forget that Google News is the largest aggregator of newspaper and broadcast news in the U.S. and in the world. And on top of their media dominance, Google is now America’s number one corporate acquisition machine per Bloomberg with 144 mergers and acquisitions to date.
Again, if opposing old media concentration is a principled position, why are these same critics so silent when new media at the edge is dramatically more concentrated than old media at the core?
In sum, to be fair it is critically important to look at this proposed merger in perspective.
When one weeds out the hype, hyper-criticism, hyperbole and hypocrisy, one learns this merger is pro-competitive.
That’s because Comcast will upgrade Time Warner Cable’s several million customers and geographic territory with significantly more innovative and competitive services than they enjoy now.
Scott Cleland is Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests and President of Precursor LLC, a research consultancy for Fortune 500 companies. Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration.