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US: Law, economic heavyweights warn FCC against Comcast deal

By  |  October 22, 2014

In a letter signed by nearly 40 law and economics experts to Federal Communications Commission, authorities were warned against Comcast’s proposed takeover of Time Warner Cable and its negative implications for companies such as Netflix and Amazon Prime.

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    The 16-page letter, signed by heavyweights including Net Neutrality champion Tim Wu, antitrust guru Herbert Hovenkamp and University of Florida law professor D. Daniel Sokol, warn the FCC that Comcast’s resulting 40 percent market share following the takeover is an illegal monopoly.

    Comcast has argued that antitrust concerns are minimal from the deal, pointing to online competitors as continuing to preserve market competition. But the letter, sent to FCC chairman Tom Wheeler on Monday, argues that Comcast could harm those online competitors like Netflix by forcing them to pay higher fees to ensure that Comcast does not interfere with their streams.

    Those companies like Netflix, Hulu and Amazon Prime, known as OVDs, depend on providers like Comcast and Time Warner to reach consumers, It could become a problem following the Comcast merger, the letter says.

    ”The incentive to act anticompetitively against unaffiliated OVDs, which existed pre-merger, will be greater based on the increased market power that the combined firm would have against incipient threats,” the authors warn.

    The FCC has said it will decide sometime next year on whether to block or approve of the deal.

    The full text of the letter can be read here.

    Full content: Gigaom

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