Stated differently, anyone who wants to reach one of Comcast’s customers-like Netflix delivering a film or Spotify delivering a song-has to go through it, and it alone. Spurred on, perhaps, by white papers submitted by Netflix, Dish, Public Knowledge, and various antitrust professors, the Justice Department decided, conceptually, to turn things around, and in economic jargon, to look at the other side of the "two-sided market." That meant noticing that Comcast sells both Internet access to customers and customer access to the Internet. Sure, they might be near-monopolies in many parts of the country, but the deal was simply about linking up regional monopolies, not increasing them.īut that theory fell apart when the Justice Department began to look in a different way at what Comcast does, and to seriously consider the company’s role not just in selling cable and broadband, but in delivering content over the Internet more generally. Because the two serve different regions of the United States, Comcast insisted, they are not actually direct competitors. But Comcast was confident that its merger with Time Warner would be easily approved, based on the argument that the two companies have a fundamentally different relationship than similarly large companies in other industries. You can be sure that if Walmart and Costco wanted to combine forces, or Ford and G.M., they'd face an uphill battle. 1 and 2 cable companies, and if two of the largest companies in any industry wanted to merge, the government would inevitably take a close look. Time Warner and Comcast are the nation's No. Instead, I think, the real story lies in the Justice Department's gradual adoption of an important, if somewhat novel, antitrust theory, which has been adapted to consider how business is done on the Internet. What explains the change from inevitability to sudden failure? The reason is not about any particular story of lobbying, public relations, or political deals. After the deal met opposition from two federal agencies, Comcast is now planning to drop its offer. More than a year later, Comcast's proposal is dead. Last March, Cohen said, "I have been struck by the absence of rational, knowledgeable voices in this space coming out in opposition, or even raising serious questions." Comcast, and its head lobbyist, David Cohen, moved quickly to establish a sense of inevitability for a merger that, as Comcast stated in February, was "expected to close by the end of 2014." While some people (including myself) opposed the planned deal and called for closer scrutiny, Comcast was unimpressed. In February of 2014, when Comcast announced its plans to acquire Time Warner Cable, it assured the public and the government that the transaction would be good for customers and have no effect on competition.
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