Home Technology For Now, Netflix, Inc. Alone In Opposition To Comcast/Time Warner Deal

For Now, Netflix, Inc. Alone In Opposition To Comcast/Time Warner Deal

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If the deal goes through many rightfully worry about the power the new company would wield. It would control 40% of the United States’ Internet services along with 19 of the nation’s largest cable markets. Amazon.com, Inc. (NASDAQ:AMZN), YouTube, CBS Corporation (NYSE:CBS) and The Walt Disney Company (NYSE:DIS) along with Netflix, Inc. (NASDAQ:NFLX) to name a few all have a large stake in the outcome of the merger. Outside of Netflix, many are worried what might happen if they speak against the merger only to have it go through in the end.

While many would like to make noise alongside Netflix, Inc. (NASDAQ:NFLX), most are worried what might come of their dealings with Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) if they find themselves on the wrong side of the giant.

Why so little opposition?

“Every company, including ours, knows how we feel about the merger, but the question is, Are we going to do anything about it?” said one senior media executive who insisted on anonymity when speaking to Jonathan Mahler of The New York Times. “Who’s going to be the first to kick sand in the bully’s face?”

Netflix, Inc. (NASDAQ:NFLX)’s opposition to the merger drew a quick rebuke from Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) which suggested that the company is hiding its own interests in pro-consumer propaganda. During peak hours, Netflix streaming can consume nearly 33% of worldwide bandwidth and Comcast claims Netflix is unwilling to pay for it.

Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) has also claimed that the merger is somehow not anticompetitive because the companies have only a small geographic overlap. Additionally, it claims that content providers are the real worry not the cable company.

“The balance of power in carriage negotiations has tilted pretty decisively to the programmers’ side,” said D’Arcy F. Rudnay, Comcast’s chief communications officer referring to the argument with CBS that saw it blackout the network only to lose hundreds of thousands of subscribers. However, many believe that an approved merger would allow Comcast to drive down content fees due to its size and offer preferential treatment to the networks it acquired when it bought NBCUniversal.

Is the merger inevitable?

Randy Falco, chief executive of Univision halfheartedly backed Netflix, Inc. (NASDAQ:NFLX) calling the deal “truly a cause for concern.”

“You can bet that everyone and his brother is trying to strike a sweetheart deal with Comcast right now in exchange for either supporting or simply not opposing the deal,” said Craig Moffett, an independent media analyst with little stake in the merger.

Netflix, Inc. (NASDAQ:NFLX) is in the unique position of being able to offer opposition to the merger because it has already worked out a multiyear ageement with Comcast with regards to reliable access to fast Internet for its customers that are Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK) subscribers.

This isn’t Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK)’s first acquisition rodeo. They successfully overcame resistance to its purchase of NBCUniversal when it became the first cable operator to control a major network in 2011. It has over 100 registered lobbyists in the Nation’s Capital alone including a former commissioner of the FCC.The regulatory review will most likely continue into 2015 and while the grievance process with the Federal Communication Commission ins public, companies can anonymously voice their opposition with the Justice Department and many are expected to do so.

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Brendan Byrne

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