Comcast is trying to win public support for its planned $45 billion acquisition of Time Warner Cable, which the company announced earlier this year. Today at the CODE Conference, Comcast CEO Brian Roberts said there’s enough competition in the market to support its plans, while downplaying concerns raised by Netflix and others.
The Time Warner Cable deal, which would combine the No. 1 and No. 2 cable providers, would leave Comcast with a combined 30 million video subscribers and make it the dominant video and broadband provider in 19 of the top 20 residential markets in the U.S.
In terms of mere size alone, the creation of a mega-cable provider has drawn criticism. Comcast, however, argues that the deal shouldn’t be struck down for anti-competitive reasons, since it and Time Warner Cable don’t actually compete in any of the same markets.
At the conference, Roberts said there were at least four multichannel video providers in most of the markets that it’s entering through the Time Warner Cable acquisition. He also downplayed the impact that the purchase would have on the larger market.
“When you net this transaction out, we get New York and Los Angeles,” Roberts said. “Seven million customers is what we’re adding.”
Comcast has also attempted to make the case that merging with Time Warner Cable would actually benefit consumers, since TWC subscribers would get better on-demand services and streaming apps, not to mention access to its cloud-powered X1 set-top box and DVR platform.
At the conference, Roberts showed off the X1 platform, which it is shipping to new customers today while also trying to bring other customers on board. He said the company has 1,000 engineers working to continually improve the experience for consumers. Roberts also talked up the 50,000 titles available through its on-demand service.
Roberts also said it’s working to improve customer feedback, since Comcast and Time Warner Cable are routinely rated as some of the least-liked companies in the U.S.
“We don’t wake up every day and go to work and say ‘we want to be hated,'” Roberts said.
Comcast has touted stronger broadband performance compared to what Time Warner Cable generally has to offer. That said, there are some who worry about the high concentration of broadband subscribers all under one provider.
While Comcast and Time Warner Cable’s planned divestiture of nearly 4 million cable subscribers through a deal with Charter Communications would ensure it held fewer than 30 percent of all residential pay TV subscribers, it would remain a broadband powerhouse due to its heavy penetration of high-speed Internet services in many major metropolitan areas.
Netflix, for instance, publicly opposed the merger in its first-quarter letter to shareholders due to anti-competitive concerns. Citing a research analyst, the streaming video provider argued that if the deal is approved the combined company’s footprint would pass more than 60 percent of U.S. broadband households.
That opposition came after Netflix and Comcast agreed to a paid interconnection deal that cut out transit middle men, and sped up access to Netflix streams for Comcast subscribers. But Netflix continues to take Comcast to task for charging both content providers and broadband subscribers to connect with one another.
That’s an argument Comcast has said is a “House of Cards.”
In explaining those issues, Roberts said that Netflix is benefitting from the agreement, especially given the amount of traffic that it’s pushing.
“It’s not a lot of money. It’s less money — we think — than they were paying, and they’re getting better performance,” Roberts said. “There needs to be responsible network management when one company is a third of traffic on the Internet.”