Comcast Alleges “Extortion” By Opponents of TWC Deal

Comcast Corporation (NASDAQ:CMCSA) lashed out at those opposing its merger with Time Warner Cable Inc (NYSE:TWC), accusing several of them of making “extortionate demands.” Refusing to bow to critics, Comcast said the proposed $45.2 billion deal would result in increased investment, innovation and competition and is thus pro-consumer and in the public interest.

Comcast Alleges "Extortion" By Opponents of TWC Deal

Comcast criticizes Discovery and Netflix

Deciding that a good offense is the best defense, Comcast Corporation (NASDAQ:CMCSA) charged that Discovery Communications Inc. (NASDAQ:DISCA) “demanded unwarranted business concessions from Comcast as a condition of Discovery’s non-opposition to the transaction,” in comments filed with the Federal Communications Commission. “Such extortionate demands are patently improper,” the filing continued

Comcast also targeted Netflix for criticism. “As the biggest edge provider and OVD in the country … one would expect Netflix to act responsibly on the Internet, but instead, Netflix deliberately sent its traffic on routes that could not support it, and ignored other routes that could easily have handled it,” the company claimed.

Rebuttals from Netflix and Discovery

“It is not extortion to demand that Comcast Corporation (NASDAQ:CMCSA) provide its own customers the broadband speeds they’ve paid for so they can enjoy Netflix,” Cliff Edwards, a Netflix spokesperson, said in an interview earlier this week. “It is extortion when Comcast fails to provide its own customers the broadband speed they’ve paid for unless Netflix, Inc. (NASDAQ:NFLX) also pays a ransom.”

Netflix “grudgingly paid to improve performance for our mutual customers — a precedent that remains damaging for consumers, who ultimately pay higher costs — and for other innovative businesses that can be held over the barrel by Comcast to do the same,” Edwards continued.

“If the merger were to proceed, this one company, Comcast, would have control over high-speed residential Internet in a majority of American homes, and that is clearly not ‘great’ for consumers,” he concluded.

Discovery Communications Inc. (NASDAQ:DISCA) also chimed in on the subject. Comcast Corporation (NASDAQ:CMCSA) is “trying to divert attention away from the real issue,” said David Leavy, Discovery’s chief communications officer. “Comcast chooses to not talk about the substantial program discounts they currently get, or what they would do post-merger to demand extreme discounts from cable programmers or block the launch of new networks and brands,” he also noted.