The Blog

The window at the FCC has closed for comments on the Comcast/NBCU transaction.

Comcast asserts that the deal really isn’t that big – and does it with a picture.  With a large, long, red bar it shows AOL/TW at $165 billion, but Comcast/NBCU is just $30 billion and gets a pale yellow, dinky little bar.  No problem!

The picture lets us think about everything that’s happened in the last ten years or so.

AT&T/TCI, 1999, SBC/Ameritech, 1999, Bell Atlantic/GTE, 1999, AT&T/MediaOne, 2000, AT&T/Comcast, 2002, Sprint/Nextel, 2005, SBC/AT&T, 2005, Adelphia, 2006, AT&T/BellSouth, 2007

And now, Comcast/NBCU.  (I’d show you the picture but the file doesn’t allow copying.)

Three thoughts prompted by that list.  First, there’s been enormous consolidation in the market for high-speed Internet access services.  All those mergers.  The most recent figures from the FCC, released in February of this year, show that when it comes to local access at or above 3 Mbps most Americans have a choice of at most two providers – a duopoly.

What’s really interesting, though, is the second thing the list should make you think about.  When it comes to access at higher than 6 Mbps speeds, cable is clearly in charge.  Over 96% of that market is cable’s – and the big players don’t compete with one another.  Those are the speeds you need to watch video.

And that’s why the relative size of the merger isn’t all that relevant.  What’s relevant is the market power that Comcast has in particular regions to provide what is rapidly becoming a single fast pipe to the home.  Over that pipe, the cable industry’s view is that Internet access can take up a few channels but that the rest of the pipe belongs to them.  And they have every interest in ensuring that alternative video marketplaces online don’t take off.

I’ve read the last filings that came in this week.  Comcast does a masterful job of pulling together all the objections and showing how they’ve been answered/cleaned up/distinguished/are merely complaints by competitors/are really attempts to work out industry structures through the merger process.

No one has ever seen a lobbying campaign to equal this one.  That’s the third thought prompted by the picture:  those other guys were pikers compared to Comcast.