The Time Warner Mega Merger Not So Good After All

Dish Vs DirecTV
Time Warner-Charter Merger

The much-awaited merger between Charter Communications and TWC is over, which has made Charter the second largest cable provider in the country. However, there are some who are not happy about the merger, and see it as the creation of a price-gouging monster.

Charter paid around $10.4 billion dollars to buy Bright House Network and about $55 million for Time Warner Cable. The purchase was approved by The Federal Communications Commission and the U.S. Department of Justice after a long wait, but also with a few rules. The forewarnings include that there would be no data caps and TV exclusivity deals to deter competition. This should come as a good news to the subscribers, but opponents feel the other way around.

According to public knowledge senior staff attorney, John Bergmayer, “there is some solace that, if rigorously enforced, these conditions should eliminate the more egregious harms this merger could cause while creating a baseline for acceptable industry behavior.” However, he added that “it is hard to cheer for further media and broadband consolidation, regardless of what conditions the FCC or DOJ might adopt.”

DirecTV Packages
Charter TWC Deal

For the average customer, it would mean higher bills, as the Charter would have to hike its prices to pay the debt which it accumulated while completing the merger. As Tim Karr, senior director of strategy at the advocacy group Free Press, wrote in a blog post earlier this month, “Charter will need to hike prices to pay down the nearly $27 billion in new debt it took on to complete its merger. That’s a burden that amounts to more than $1,000 per average Charter customer.”

Even the President of Free Press Craig Aaron gave a warning by calling the merger “wasteful and costly,” undermines FCC chairman Tom Wheeler’s “oft-stated priority of competition, competition, competition.”

“It hands far too much control over the internet’s future to a cable giant with the incentive and capability to gouge its customers with higher and higher prices,” Aaron said. “It gives cable monopolists like Charter and Comcast the power to throttle the nation’s burgeoning video market and stifle innovation at the edges of the network.”

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