This wasn’t unexpected, but it’s still significant: Netflix has gone on record opposing the merger of Philly-based Comcast with Time Warner Cable. The Washington Post reports, “Netflix is the first major Web company to criticize Comcast’s acquisition plans.”
In its first-quarter letter to shareholders, Netflix chief executive Reed Hastings and chief financial officer David Wells said the merger would create a single company with too much power over the broadband Internet market. Combined, Comcast and Time Warner Cable could control as much as half of all broadband Internet subscriptions, with most of those homes having no alternative options for broadband service providers, the executives said.
“Comcast is already dominant enough to be able to capture unprecedened fees from transit providers and services as Netflix,” the executives wrote. “The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger.”
Comcast responded with an angry press release of its own: “Netflix’s opposition to our Time Warner Cable transaction is based on inaccurate claims and arguments. There has been no company that has had a stronger commitment to openness of the Internet than Comcast and we are the only ISP in the country that is currently legally bound by the FCC’s vacated Net Neutrality rules. In fact, one of the many benefits of our proposed transaction with Time Warner Cable will be the extension of Net Neutrality protections to millions of additional Americans.”