The Comcast-TWC Merger: Limit the Government’ s Options

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Jarod Bona, Apr 14, 2014

The antitrust world is abuzz as the Antitrust Division of the Department of Justice reviews Comcast Corp.’s $45.2 billion bid for Time Warner Cable, Inc. The transaction and its competitive implications have captured antitrust and general public attention in part because it involves multiple complex markets that are developing at the accelerated rate of the underlying technology itself. Whatever the DOJ decides to do, it will affect important markets for years to come.

Comcast and Time Warner are the two largest companies to offer internet, phone, and cable television services to consumers throughout the United States. In a typical deal between the top two companies in the same market, it is an easy decision for an antitrust agency to say no. But this isn’t the typical deal, and the action isn’t even in these consumer markets.

Comcast and Time Warner have the largest market shares in these markets, but they don’t really compete. Their overlap is quite minimal-nothing a quick divestiture wouldn’t solve. The issues are on the other side of these markets: the companies as buyers of content for cable and as controllers of the increasingly crowded bridge to customers-broadband. It is here where the DOJ should and will spend its energy and resources.