Writers Guild of America Asks FCC to Stop Comcast Time Warner Merger

Consumer groups and a number of states' attorneys general are quite unhappy with the prospect of a Comcast-Time Warner merger. The merger will create the largest cable company in the U.S. The company will also control 30% of the entire broadband market in the U.S. Consumer groups say that will cause massive rate hikes due to the lack of competition. Comcast has also been under fire for other issues by consumer groups. Now the Writers Guild has filed a brief in opposition to the merger, which must be approved by the FCC before it can be finalized.

The WGA West strongly opposes the merger, and now the WGA East has also announced its opposition to the merger. The WGA first laid out its position earlier this month, pointing out the dangers specifically to writers:

Writers, who have experienced the detrimental effects of consolidation between studios and networks over the past two decades, understand why this consolidation is bad. It will give these distributors, Comcast in particular, more power over programming. With a larger market share the company has more power to cut costs when negotiating retransmission and affiliate agreements with broadcast and cable networks. These are incredibly important revenue sources that help fund the original programming Guild members create. If Comcast represents one-third of the television audience and can threaten to blackout a network unless it agrees to cut costs, the effects could be disastrous to content and its creators. Meanwhile, on the consumer side these companies can use their power to raise prices. They know consumers have few viable alternatives...

Comcast has a strong incentive to limit independent online video because it is both a distributor and owner of video content. In fact, the company has already done so. In response to the popularity of online video sites like Netflix, Comcast developed its own service called Xfinity Streampix. However, unlike every other video site, Streampix does not count against Comcast’s data caps when watched through an Xbox. This discriminatory treatment is an example of how Comcast can use its power to favor its own content over that of competitors. This is particularly bad news for writers, who are beginning to benefit from the additional creative and economic opportunities of new online competitors like Amazon and Netflix.

You can read the WGA's full report on the dire implications if this merger is approved here.

Posted on March 25, 2014

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