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Game on: Comcast, TWC file deal with FCC

Tue, 04/08/2014 - 1:22pm
Mike Robuck

This morning Time Warner Cable and Comcast filed their applications and public interest statement with the Federal Communications Commission.

Today’s FCC filing isn’t the first salvo in Comcast’s $45 billion bid to take over Time Warner Cable—last week both companies filed a Hart-Scott-Rodino notification with the Department of Justice, but it provides a game plan for answering critics’ concerns over the deal.

The review requests to the FCC and the DOJ started the clock on the formal regulatory approval process for the deal that was announced in February. After making their reviews, the FCC and DOJ are expected to issue their rulings by the end of this year.

To supplement the redacted FCC filing, Comcast executive vice president, public policy David Cohen summarized Comcast’s efforts in a blog post this morning. Cohen is scheduled to testify tomorrow before the Senate Judiciary Committee.

“The FCC filing lays out in considerable detail how Comcast and TWC are better together for millions of customers and businesses, describing the exciting enhanced services and other concrete consumer benefits that will be available because of the transaction,” Cohen wrote. “Importantly, we show that these significant benefits are achieved without diminishing competition in video, broadband, phone, programming, advertising, and other markets.”

Cohen wrote that aside of economies of scale, the merger would accelerate investments in R&D, innovation, and infrastructure. On the technology front, Cohen said that Time Warner Cable’s most popular broadband tier was 15 Mbps on the downstream, while Comcast’s was 25 Mbps.

Time Warner Cable was slow out of the starting blocks with DOCSIS 3.0-based speed increases, but now has its network fully upgraded for 3.0. While Time Warner Cable has started to reclaim bandwidth through analog-to-digital conversions, Cohen pointed out that Comcast had already transited to “a fully digitized network” and “stands ready to implement DOCSIS 3.1.”

One third of Comcast’s customers currently receive speeds of over 50 Mbps, and Comcast has launched a 505 Mbps tier in some markets.  

During its fourth-quarter earnings call Time Warner Cable said it would start offering faster speeds in New York, Los Angeles and additional markets through its “TWC Maxx” project.  Comcast’s game plan for going all digital and boosting upstream speeds is similar to what Time Warner Cable was already doing, but given Comcast’s resources will no doubt benefit the former Time Warner Cable subscribers sooner if the deal passes muster.

Cohen also wrote that while Comcast was working its way towards 1 million Wi-Fi hotspots Time Warner Cable only had 29,000 to date.

“This transaction will accelerate network upgrades in the TWC markets and produce a more advanced broadband network,” he wrote. “On the video front, Comcast will bring our industry-leading X1, VOD, and online video options to TWC customers.”

Comcast currently offers 50,000 programming choices on TVs, while TWC has only about 15,000-20,000, according to Cohen. Other benefits would include better business services across the combined footprints of Comcast and Time Warner Cable.

The deal would also serve to broaden Comcast’s commitment to Net neutrality, Cohen wrote. In the filing, Comcast said online alternatives have already created competition in video sector while there is at least one broadband competitor in almost all of the markets.

In addition to the FCC and DOJ reviews, consumer advocacy groups and other opponents of the deal have argued that Comcast would have more leverage with content providers, cable networks and broadcasters. 

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