Questioning Comcast’s Merger Plans

Can anything slow the company down? How about demands for giveaways?

Will Comcast be able to pull off its merger with Time Warner Cable? The smart money says yes — the company has a lot of muscle in Washington D.C. —but there’s a real possibility that federal regulators will put strict conditions on their approval.

Let’s see what the headlines have to say about this:

Is Comcast’s Time Warner Cable Acquisition in Jeopardy? As an investor, you would be foolish to not want the Comcast/Time Warner acquisition to go through. And although the market appears to be hedging its bets, it’s a pretty good chance the FCC and DOJ will sign off on the merger. The larger entity will be better equipped to negotiate programming costs with channels. As a subscriber, the result of this acquisition is less important than most think. However, that doesn’t mean that pay-TV providers aren’t starting to pay attention to changing demands. Last year pay-TV experienced its first every year-over-year subscriber drop as a result of the powerful trend of cord cutting. And many of those still with pay-TV are looking a smaller, less-expensive packages with an emphasis on Internet service rather than TV. If pay-TV doesn’t adjust to this trend by adding more value, the result of this merger is akin to rearranging deck chairs on the Titanic.

Lots of attempts to make the merger seem in jeopardy seem half-hearted. Let’s try again:

Five Reasons Why Critics of Comcast’s Time Warner Cable Deal Are Feeling Hopeful: Comcast has already made some voluntary commitments to get the deal approved, but regulators are taking a closer look at industry complaints the cable giant hasn’t abided by conditions imposed on its acquisition of NBCUniversal three years ago. For example, Bloomberg LP, which owns a cable network, filed a complaint against Comcast for failing to place its channel near other news channels, particularly Comcast-owned competitor CNBC. Comcast lost the suit after the FCC sided with Bloomberg. Two years ago, the FCC fined Comcast $800,000 for not making it easy enough for customers to discover the $49.95 stand-alone Internet service the company had agreed to offer as a condition of its deal to acquire NBCUniversal in 2011. (Re/Code)

Speaking of merger conditions, some New York politicians have a few ideas about what they’d like to see happen in order for Comcast to become the company that rules us all:

Free Broadband for Public Housing in New York Sought as Condition of Comcast Deal: A group of New York politicians is lobbying Comcast to provide free broadband to all city public housing residents and expand other low-cost Internet offerings as a condition for the cable operator’s proposed $45 billion merger with Time Warner Cable. The group also is asking that Comcast provide free broadband access at senior, youth and community centers as well as in homeless and domestic violence shelters. Also on the list of conditions is free Wi-Fi service in all city public parks and commitments to provide faster speeds. It also is seeking agreements from Comcast to operate under net neutrality, the idea that all Internet content should be treated equally as it flows from content providers to consumers and back. (New York Times)

How much is Comcast willing to give away in order to secure the merger? We may yet find out.

True Gig

Comcast has been busy on the trademark front…

Comcast Trademarks “True Gig” Name For High-Speed Service It May Someday Launch: The Donohue Report noticed that Comcast has filed an application with the U.S. Patent and Trademark Office to trademark the phrase “True Gig” which it hopes to use to describe a lot of what currently falls under the Xfinity umbrella. The key is that the name will cover “high speed access to the Internet, mobile networks and other electronic communications networks,” whether it’s over cable, fiber, or wireless. Interestingly, Comcast also singles out a secondary goods and services description for True Gig to cover streaming video services. Does this mean that Comcast, which failed to make Streampix a competitor to Netflix or Amazon Prime, will once again try to dip its toes into that open water, or will True Gig just be used to cover the streaming video on-demand service that Comcast offers only to its own pay-TV subscribers? (Consumerist)

Maybe it’s superfast Internet? Maybe with a downside?

Comcast trademarks “True Gig” and plans multi-gigabit Internet service: As for gigabit Internet, Comcast is already halfway there with its “Extreme 505” service, which uses fiber rather than cable to deliver 505Mbps download speeds and 100Mbps upload. Extreme 505 costs $400 a month and requires a three-year contract. It’s available in some markets but not throughout all of Comcast’s territory. Plenty of fiber-to-the-home services offer gigabit speeds (at much lower prices), so that provides one clear path to a gigabit for Comcast. … Gigabit Internet would make it easier for customers to hit Comcast’s 300GB monthly data caps, triggering overage charges. Comcast is testing the caps in some markets and plans to extend them to its whole territory within five years. Comcast said its data plan trials are “market specific” rather than “service level specific,” so the limits and overage charges apply to customers within the trial areas even if they have the fiber-based Extreme 505 service. (Ars Technica)

Other headlines

Study: Comcast and Verizon connections to Cogent dropped below 0.5Mbps: Plenty of Comcast and Verizon customers know just how bad Internet service was on major ISPs during the months-long battle over who should pay to deliver Netflix traffic. Netflix eventually agreed to pay Comcast, Verizon, Time Warner Cable, and AT&T for direct connections to their networks, but until that happened there was severe degradation in links carrying traffic from Netflix and many other Web services to consumers. Connections were particularly bad between ISPs and Cogent, one of the backbone operators that Netflix paid to carry its traffic. While M-Lab observed degraded performance across the country, the worst it found was in the New York City connections between Cogent and ISPs. It didn’t get quite as bad in other cities but the M-Lab report detailed performance problems in Dallas, Los Angeles, Seattle, Atlanta, Chicago, and Washington, DC. (Ars Technica)

And oh, yeah, Comcast actually produces products we use!

Here are the latest features being added to the X1 cable box: We’ve made more than 5,000 updates to the platform this year alone…some are big, some are small but all are geared towards improving the overall viewing experience.  Here are some of the new features and updates coming to the platform this month: Restart Notification. Custom Playlists. “Primetime” and “Upcoming” buckets. Navigation enhancements. Whether it’s customer-facing features like the above; or general performance improvements to make the platform better, stronger and faster, X1 enables us to rapidly innovate and deliver new features and updates to our customers in real-time. We can’t wait to show you what’s next. (Comcast)

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