In a massive win for the public interest, Comcast abandoned its proposed merger with Time Warner Cable on Friday morning.
Had the $45 billion deal gone through it would have united the nation's largest cable TV and Internet service provider with the second-largest cable company. The combined companies would have given Comcast control of more than a third of the U.S. pay-TV market and more than half of the U.S. triple-play market for video, voice and Internet services.
But in the last week Comcast's merger ambitions began to fall apart. First, Bloomberg News reported that regulators at the Department of Justice were highly skeptical of the deal. Then the Wall Street Journal and Politico reported that staff at the Federal Communications Commission planned to recommend a lengthy hearing to review the public interest merits of the deal—a process that, according to insiders and analysts, would tie the merger proposal in knots.
Regulators seem to have heard the nearly one million Americans who have told Washington that the merger helps only the people in the executive suites of Comcast and Time Warner Cable. These executives failed to see the reality plain to all of the deal's many opponents: Giving so much control over our communications system to one company—especially one with a track record of spiraling prices, terrible customer service and blocking Internet content—would be a disaster.
Instead Comcast plowed tens of millions of dollars into a lobbying machine designed to woo Washington through deception. They plastered local media with ads claiming the merger to be pro-consumer, pro-competition and pro-Net Neutrality, when a cursory review of Comcast's history proved the opposite to be true.
Few bought it. Comcast's failed bid to control Time Warner Cable should be a lesson for the rest of the industry—especially those contemplating similar acquisitions. Communications giants should stop trying to create monopolies and instead focus on competing to provide the fast, affordable and neutral Internet services that so many Americans demand.
The media consolidation business model doesn't work for America's Internet economy. Comcast's relentless drive to acquire competitors has left too many Americans paying too dear a price for an extremely limited choice of providers. Meanwhile the U.S. has fallen behind other developed countries in nearly every measure of Internet cost, speed and accessibility.
The million people who called on Washington to reject this merger are a reflection of the growing customer dissatisfaction in the U.S. Slowly, decision makers in Washington are realizing that we can no longer allow a few companies to control so much of our communications.
The rejection of this merger reflects the FCC and the DOJ's renewed commitment to competition and consumer protection. The millions of dollars that Comcast has spent on bankers, lawyers and lobbyists to push this ill-advised merger would have been better spent improving its networks.
Americans don't need a bigger Comcast; they need more choices for affordable and open broadband services nationwide. The demise of this merger, alongside the Net Neutrality victory from earlier this year, mark the rise of Internet users as a powerful political constituency with demands that can no longer be ignored by elected officials and policymakers.
Timothy Karr is the senior director of strategy at Free Press.