Zero competition means people have slow Internet speeds, high prices and no alternatives to choose from

Sep 25, 2014 20:59 GMT  ·  By

Earlier this week, Comcast sent the FCC a scalding document of over 320 pages where it accuses companies such as Netflix of having ulterior motives to opposing the proposed merger with Time Warner Cable.

I very nearly couldn’t believe what I was reading, but then again, I remember that this was Comcast we were talking about, the same company that said merging with Time Warner was absolutely necessary for its survival because Google and Netflix were coming fast.

That is – Netflix, a company that doesn’t act as an internet provider and Google whose Fiber service proves that faster Internet is possible for less money in all three locations – Austin, Kansas City and Provo. And that’s cities, not entire states.

Comcast is accusing companies such as Netflix and Discovery of opposing the merger because they actually want to extort the ISP. What do they want? Well, Netflix wants to have its service delivered to customers for a better peering deal, while Discovery wants more money for Comcast subscribers to get their channels.

Zero competition among US ISPs

What are the guys at Comcast smoking?! Do these guys even believe what they’re saying?

If Netflix, Discovery and a long list of other companies are urging the FCC to not allow the merger between the two giants, it couldn’t possibly be because the barely-there competition among ISPs in the United States would vanish completely, could it?

Comcast, Time Warner Cable, Verizon and other big names have already sliced up the United States however they wanted, making sure that they wouldn’t be stepping on each other’s Tails. Customers are complaining that they have no other option to choose from; if their Comcast connection is bad, they can’t pick another company simply because there’s no one there.

Smaller ISPs are pretty much invisible, while the bigger ones that can actually provide a higher-quality service have divided cities as if they’re drug dealers taking care of their turf.

Here's how Comcast justifies merging with TWC

Comcast execs have said that fears about the lack of competition are unfounded. “Both in video and in broadband, we don’t compete with Time Warner. They’re in New York, we’re in Philadelphia, they’re in LA, we’re in San Francisco. You can’t buy a Comcast in New York, you can’t buy a Time Warner in Philadelphia. So there’s no reduction in competition,” said Brian Roberts, Comcast CEO.

Oh dear. That statement right there is the very reason of why this merger must not happen. It’s not an issue of a drop in competition levels because Comcast would not be competing with Time Warner, it’s an issue of everyone else not being able to compete with this mega company that they want to create.

The Wall Street Journal published a graph recently. When it comes to broadband, the two companies combined would have a 36 percent market share in the United States, while second place is occupied by AT&T with 18 percent market share.

When it comes to pay TV, the two of them combined would have 33 percent market share, while AT&T and Direct TV would have a combined 25 percent.

Huge risks for businesses and consumers

If the merger is approved, Comcast would end up having the upper hand in over half the states in the United States. This would enhance the company’s powers in the market even more.

If Netflix was bullied earlier this year into signing a peering deal by Comcast execs who “stepped” on the Internet cable and strangled access to the company’s service for millions of users, imagine what will happen once it turns into a mega company.

Discovery pointed out that despite accusations brought by Comcast, the telco is choosing not to talk about the substantial program discounts they’re already getting and what demands they could have if the deal is finalized. The network indicates that they could even end up demanding even bigger discounts or block the launch of new networks and brands if they don’t agree.

It’s clearer than ever that the FCC needs to get a good handle on ISPs and tighten the grip a bit more and to start giving a damn about the options customers have. The big players immediately reacted to Google entering the ISP playground and started improving their offers – speed hikes and lower prices. And that’s because this is what happens when there’s actual competition. Broadband prices in the United States are astronomical, while the speeds they offer are microscopic.

Aside from Google, no other company offers a good balance between price and quality, and even here prices are a tad high compared to offers from other countries. Take Romania, for instance, where the same gigabit Internet offered by Google costs the equivalent of a mere $16 per month, compared to the $70 asked in the United States.