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50 mayors support Comcast merger, offer misleading examples of ‘competition’

A Comcast service van. (Photo: Flickr CC)
A Comcast service van. (Photo: Flickr CC)

Over 50 U.S. mayors endorsed a letter supporting a proposed merger between telecommunication giants Comcast Corporation and Time Warner Cable Incorporated, praising both companies as being “stalwart community partners” who would better serve their cities and towns should the Federal Communications Commission green-light the deal.

The letter, addressed to FCC Chairman Tom Wheeler and others, was filed with the agency on Thursday.

In the letter, 51 mayors from Alabama, California, Colorado, Florida, Kansas, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, South Carolina and Texas attempted to downplay concerns that a combined Comcast-Time Warner Cable was against the interest of the public, and instead proposed that a cable and internet behemoth would actually better serve their communities.

“Cities joining the Comcast service area will benefit from increased network investment, faster Internet speeds, improved video options and leading the community development programs to help us tackle important community challenges like the digital divide,” the mayors wrote in the letter.

DATABASE: Meet the 51 mayors who endorsed the Comcast-Time Warner Cable merger

In addition, communities currently serviced by Time Warner Cable would benefit from better video and Internet services because “Comcast has pledged to invest hundreds of millions of dollars a year speeding up and improving the combined company’s networks,” the mayors said.

The mayors wrote that the proposed merger was already influencing Comcast and Time Warner Cable competitors to offer better services to their customers. The letter cites Google’s plan to expand its Fiber TV and Internet service to 34 additional markets, AT&T’s rollout of 1-Gigabit Internet service and Sprint’s proposal to offer 200 Megabit-per-second mobile wireless Internet speeds as proof that the merger would spur competition, not harm it.

But the mayors failed to note that Sprint’s pledge of a faster wireless data network was predicated on a merger with rival T-Mobile, which fell through earlier this month. In addition, AT&T’s 1-Gigabit Internet service is likely being offered as an incentive for the FCC to approve its own proposed merger with Comcast competitor DirecTV; the Internet service is offered to residents in a handful of cities at a whopping $100 a month, nearly triple what the company sells it’s basic broadband Internet service for. And while the mayors assert that Google is expanding its Fiber service to more than 30 areas, they fail to note that Google is in preliminary talks with those communities and that the rollout may never happen.

Among those who signed off on their support for the merger was Michael Nutter, the mayor of Philadelphia where Comcast’s corporate headquarters is based. Indeed, most of the mayors are from communities serviced by Comcast; only a handful of mayors from Time Warner Cable communities endorsed the letter.

Comcast and Time Warner Cable publicly acknowledged their intention to merge operations in February. Regulators began probing the deal in April.

Executives from both companies have been adamant that customers and independent television programmers “will be big winners” if the transaction gains approval from both the FCC and the U.S. Department of Justice.

“I don’t think there is a distributor who has done more for independent programmers,” Comcast executive David Cohen told a Senate panel in April. Comcast is the parent company of NBCUniversal, which operates the terrestrial network NBC as well as a number of cable-specific channels.

The most-vocal critics seem less concerned about independent programming and more about their wallets. Thousands have flooded a FCC webpage dedicated to soliciting comments on the proposed merger to express concern about monopolization and rising bills — and those concerns are reaching lawmakers.

“Consumers do not want to hear complex legal jargon or obscure regulatory terms,” Senator Patrick Leahy (D., Vermont) said at a hearing. “They want to know why their cable bills are going up.”

Comcast and Time Warner Cable executives remain steadfast that a merger is the only way to go if customers want lower bills.

“There is nothing in this transaction that will cause anyone’s cable prices to go up,” Cohen said. “Whatever economic benefits generated will ultimately inure to the consumer.”

But so far, both companies have provided virtually no examples of what those “economic benefits” would be.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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