August 19, 2014
Merger Raises Flags in California Due to Existing Agreements
The much-debated merger between Time-Warner and Comcast continues to face hurdles.
The move has long been under the microscope of the Federal Communications Commission and, once again, is struggling, this time with content delivery. The FCC must decide what to do about an agreement Time-Warner made previously with Bright House Networks in which programming and technology acquisitions are handled and delivered by the company.
Bright House is the sixth-largest cable operator in the country and falls under the Newhouse family media banner. Currently, it serves 2.1 million customers in a handful of states including Indiana, Michigan and California.
An agreement was made in the 1990s, reports The Wall Street Journal, where Time-Warner has an ownership in the company and handles programming negotiations, technology deals and engineering services for the firm, for an annual fee.
The FCC recognizes if the merger is given the go-ahead Comcast would be given a larger slice in the programming negotiations pie yet, if blocked, it may increase the cost for Bright House’s customers.
One of the states served by Bright House, California, is now weighing in on the merger.
The state’s public utility commission issued a memo last week citing its concerns over the merger and how customers in the Pacific state need to be considered by federal authorities.
“Comcast and TWC, through their California subsidiaries, would potentially combine the two largest providers of high-speed last mile broadband service in the state,” reads the memo. “The merger would impact competition and consumer welfare in California’s market for wholesale telecommunications, retail voice, backhaul and broadband services.
“More importantly, the merger would have an impact on broadband deployment in California as two of the largest cable broadband services in the state form one entity.”
W. Brice McVicar is a staff writer for SiteProNews.