Netflix has been one of the most vocal opponents of the proposed merger of Comcast and Time Warner Cable. Just this week the streaming company filed a Petition to Deny with the FCC which formally asks the government to block the deal.

Netflix argues that if the two cable companies were to merge, they would have the power to manipulate the market and charge companies that utilize the internet more for faster service.

The company claims that broadband providers have the ability to act as gatekeepers, and are the only option for certain content providers to reach a particular end user. Netflix claims these providers also have the ability to block, degrade, or favor any internet traffic that flows to or from a particular subscriber. This amounts to “shakedown tactics” being used by the broadband providers against companies such as Netflix.

Netflix already has deals with a number of cable companies (including Comcast and Time Warner Cable individually) to directly connect to their networks in order to deliver content to consumers faster. Netflix however argues that it was forced into these agreements as a result of losing customers over slow speeds. The company claims that in December and January this last winter, customers that were using Comcast to access Netflix’s streaming services were reporting that the service was unusable and that some were even cancelling their subscriptions. As a result, Netflix felt it had to make agreements with Comcast and the other cable companies, despite feeling that the cost of delivery through the network was already being paid by cable consumers.

Consumers who are making the choice of internet providers often have limited choice in the matter, and, even when they have a choice, they face high transaction costs when making the decision to change internet providers. As such, companies like Netflix fear that further market concentration of internet providers will lead to higher costs and further barriers to entry for companies that deliver their product primarily through the internet.

If Netflix’s fears prove founded, customers will ultimately being paying the price. Netflix’s prices have already gone up once this year, and if they continue to have to pay higher rates to deliver their content to consumers, it is likely prices will increase again.

William Healy

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3 Responses to Netflix Seeks to Block Comcast and Time Warner Merger

  1. Matthew Gaske says:

    The controversy over the proposed Comcast and Time Warner merger clearly stems from concerns over a competitive market. While the current debate pits ISPs against a company that provides streamable content, I am curious to see the impact that a comparatively nascent and directly competitive Google Fiber will have in the ISP market. Furthermore, Google’s entrance may have already generated an impact in one location: http://www.techrepublic.com/article/comcast-time-warner-take-on-google-fiber-in-kansas-city-can-the-incumbents-compete/. Ultimately, additional corporate players joining the ISP space may settle consumer concerns regarding competition.

  2. Wayman Stodart says:

    ISPs like Comcast and Time Warner are often the only choice for consumers to access the internet. Further, internet access is rapidly becoming a critical public commodity, and many consumers cannot afford to be without the internet. Allowing this merger would allow the resulting company to be the only ISP available for many Americans, and places those consumers in the undesirable position of having no alternative but to agree to, and pay, whatever the resulting conglomerate requires.

  3. Ryan Dewey says:

    As both a Comcast and Netflix subscriber, this potential merger worries me. The services of both companies have noticeably deteriorated in the past couple of years and I agree with Netflix’s stance that this merger would only worsen the issue. Both Comcast and TWC already monopolize the internet and cable marketplace and use that position to their advantage. The more concerning issue to me here is not that Netflix will be victimized, but that Comcast and TWC’s existing customer base will be.