Merger mania continues. The two largest cable companies in the United States are combining as a result of Comcast purchasing Time Warner for $46.6 billion. The acquisition is subject to approval by the Federal Communications Commission (FCC). The President of Time Warner, David Cohen, indicates that the Board of Directors of that company approved selling because they felt it was the best way to "maximize shareholder value." Maximizing shareholder value does not always coincide with providing the best service and value to the customer.
There is a serious conflict of interest as the FCC begins to review this transaction. Below are some of the conflicts.
- The CEO of Comcast, Brian L. Roberts, is golfing partners with President Obama.
- Four months after the FCC approved a merger of Comcast and NBC Universal, one of the commissioners who voted for the deal joined Comcast’s Washington lobbying office.
- Tom Wheeler, who is the current head of the Federal Communication Commission, was the chief lobbyist for the cable industry.
- Comcast spent over $18 million in Washington last year in their lobbying effort.
85% of the country only has one option for cable. The objective of free markets and capitalism is to
This consolidation is going on as the remainder of the industrialized world has much better broadband service with their speeds being as much as 100 times faster than in the United States.
The only good news is Google Fiber is entering the broadband market and currently is in Kansas City and expecting to expand in 34 markets soon. Hopefully Detroit will be one of those markets.