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Comcast Buying NBCU Will Lead To Higher Prices... But Is That Really A Bad Thing?

from the driving-folks-to-cut-the-cord dept

Tue, Nov 9th 2010 6:49pm — Mike Masnick

I've said from the beginning that I really don't understand all of the complaints about the Comcast/NBCU merger. It's the modern equivalent of AOL/Time Warner, which really only served to hasten people to move away from crappy old solutions. So, when I see a report claiming that the end result will mean higher prices for consumers as NBC jacks up its rates, I'm still not convinced this is a bad thing. As we've seen, there's a growing trend towards people cutting the cord on cable (even if the cable folks are in denial about this). Having prices shoot up even higher seems only likely to hasten the inevitable. You can't raise prices indefinitely if there's real competition -- and the problem is that the TV companies still don't believe (or simply don't realize) that there's increasing competition every day. If NBCU/Comcast really does lead to higher prices, it'll likely also lead to more subscribers realizing that there are alternatives as well.

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Filed Under: cable, merger, prices, tv
Companies: comcast, nbc universal

42 Comments

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Anonymous Coward, 9 Nov 2010 @ 6:58pm

To the extent that those alternatives require an Internet connection and to the extent that these mergers involve companies that provide internet connectivity these companies can leverage their monopoly power to charge more for Internet connectivity.
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Anonymous Coward, 9 Nov 2010 @ 6:59pm

Re:
(heck, broadband rates in the U.S. are already completely overpriced and overly slow).
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Aaron Von Gauss (profile), 9 Nov 2010 @ 7:18pm

I think another key factor is how willing investors / financiers are willing to back productions without the involvement of the more established distribution players.
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Anonymous Coward, 9 Nov 2010 @ 7:32pm

I don't know. I think that the past 30 years of avoiding anti-trust lawsuits has resulted in a weaker economy, lost jobs, lots of debt, and lots of failing companies that are too big to fail.

The comcast/NBC merger will result in some redundancies. Those can be eliminated, increasing profits. Since comcast will have some control over hulu, which is a competitor, it will die a death of five 2-3 minute commercial breaks per show.

Comcast will also begin broadband caps.

We can regulate comcast now, we can regulate them later, or we can accept that we have allowed the 2 time finalist for worst company in America to have more say over America's communications distribution network.

I know you sometimes have to burn the village to save it. I just don't want to be in the hut that's on fire.
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Anonymous Coward, 9 Nov 2010 @ 7:51pm

There is just one difference. In the times of AOL nobody could stop others from competing with them with Comcast that is not true, they hold the infra-structure and can do whatever they want, competition is not coming anytime soon.

If people started building the necessary infra-structure to compete now it would take a couple of decades to finish it. But that is with a tremendous push for it and billions of dollars to do it and with no government interest in building something like that or people organized enough it is not going to happen anytime soon.

It can get silly pretty quickly before it gets any better.
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Greevar (profile), 9 Nov 2010 @ 8:31pm

It's worse than you might think.
If mergers such as these continue to go unchallenged, we'll find that a handful of special interests in control of all information and how we access it. Such a phenomenon would set back our progress tremendously.
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Anonymous Coward, 9 Nov 2010 @ 8:41pm

Say all you want about being a "dumb pipe" but the provider has you by the balls until something else comes out. Sure, cut your TV and even your phone, you still have to get data.

What is your option, Verizon?
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Bloomman (profile), 9 Nov 2010 @ 9:02pm

Free market
Information is available through too many pipes now Greevar. The more companies like Comcast try to force us down a pipe, the more consumers will gravitate to other options. It's beyond the control of any one entity, it's about the ability to convey your message now, not how you control your oppositions ability to disseminate.
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jjmsan (profile), 9 Nov 2010 @ 9:17pm

Re: Free market
Yeah the free market, worked so well with the financial industry, savings and loans medical care etc. We don't have a free market you say? Then please indicate where one exists. It's like Communism or the philisophier's stone. They don't exist in this reality
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Anonymous Coward, 9 Nov 2010 @ 9:27pm

The problem is this creates the incentive to remove alternatives. Comcast now has the power to remove nbc content from Hulu, Netflix, etc. That prevents competition with their cable monopoly and forces people away from alternatives.
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Pixelation, 9 Nov 2010 @ 9:32pm

"and the problem is that the TV companies still don't believe (or simply don't realize) that there's increasing competition every day."

I keep wondering when one of these companies is going to offer me the option to choose which channels I would like. A sort of "make your own package". Do I want 50 of the $1/ month channels or 10 of the $5/ month channels. Etc, etc.
The other thing I wonder about is the offers for new customers only. Loyalty goes unrewarded. It seems backwards.
Offer me the channels I want, let me pick them at a reasonable cost, reward my staying on as a customer and I think you would have a winner. This option would be hard to beat. The competition would be crushed.
Ahh, a person can dream can't they?
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marak (profile), 9 Nov 2010 @ 11:18pm

Re:
"I know you sometimes have to burn the village to save it. I just don't want to be in the hut that's on fire."

A) Love that quote at the end

B) This is going to be interesting to see what the end results are.
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Josh Taylor, 10 Nov 2010 @ 12:15am

Re:
And it will drive everyone out of their TV and internet addictions and more time at the dinner table in family conversations, more time outdoors, more time losing weight, and more time to get to read a book.

Yep, the Television media and the internet will die. Just dump your TV and Internet, and watch entertainment and the whole economy bury its' own grave. We're better off without TV or the internet. There's a lot of things we need to do.
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Michial Thompson, 10 Nov 2010 @ 1:55am

Little mikee's babble
Little Mikee;

You sit and babble non stop about "cord Cutters" and yet you offer not one bit of prrof that even one of them has went in the direction you claim. You sit and talk about how Time Warner loses 150k subscribers and then talk about how they are all going to file sharing and onlive viewing.

BUT you offer not one stitch of evidence to back up your side at all.

Here in my area I would be one of your "cord cutters" because I dumped Time Warner. BUT it had nothing to do with going to file sharing or piracy like you claim. I went to FiOS TV. I still have all my same channels and still watch all the same shows. BUT I am one of the 150k people who you claim cut the cords to go to filesharing.

In reality, FINALLY for the first time in history Time Warner has had a reasonably reliable service to compete with and they are losing a large percentage of Subscribers to that competition. The Echonomy may also be catching up with people as well, and a percentage may be forced away from TW for that reason too.

But my guess is a small percentage went to filesharing or any other free online service.

So instead of capitalizing on the fools that follow you's ignorance and playing into their foolish notion that everything is free and they have a right to take anything the feel they do not need to pay for, and offer some proof to back up your babble.
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Wolfy, 10 Nov 2010 @ 3:29am

I just recently had Con-Cast start supplying me with an internet feed for $19/MO. I now find that they have doubled the price with no warning or explanation. I'll give them a chance to explain before I tell them to turn it off. I'll go with DSL before I let Con-Cast screw me.
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Anonymous Coward, 10 Nov 2010 @ 3:36am

I think content/infrastructure combos will lead to them controlling access for people to control sharing, in the end something else will develop perhaps like ricochet used to be. The whole spying and privacy invasion against user data will be so paramount with them doing whatever they want on their network abusing users.
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Wolfy, 10 Nov 2010 @ 3:37am

BTW, to little mikee thompson #14, I'm one of those that cut the cable! You're a bloody moron or you're terribly mis-informed. I got tired of having to convince Con-Cast to NOT raise my bill for basic cable service every four to six months. They can't seem to abide by their own agreements!I finally told them to stick their cable service where the sun doesn't shine.
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Josef Anvil (profile), 10 Nov 2010 @ 3:53am

Re: Little mikee's babble
Switching from Comcast to FIOS TV is not cutting the cord, it's just switching to a new cord. "Cord cutting" is leaving cable or fiber TV completely and opting to view TV over one of the many alternatives out there.

Im not sure what studies there are out there to offer you proof that there is a cord cutting movement, but I'm sure that I am not the only one. In fact I know quite a few people that have opted out of cable recently. Yes we need the broadband connection, but that is the only service that I am using.

There are so many other options out there now for telecommunications that it's staggering. Skype, Google Talk, project free TV, YouTube, and Hulu are just some and more and more keep popping up all the time.

While I fully agree that cord cutters are just a small percentage of the market, I would suggest that they have growing influence, especially in a down economy. During the lean times a lot of free online services will probably be doing all they can to improve their offerings and drawing new subscribers/users, and the snowball effect could be quite devastating to the old players' core business.

Lastly, if you read this blog regularly you would know that Mike does not believe that everything is free, nor should it be. The point is that the technologies in the market are effecting change and the old business models are struggling for survival in court rather than in the marketplace.

I say let the horse and carriage people stick with their model as the cars appear and see what happens.
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Anonymous Coward, 10 Nov 2010 @ 3:54am

Really? Doubt it....
and the problem is that the TV companies still don't believe (or simply don't realize) that there's increasing competition every day
I seriously doubt that. I'd say the evidence suggests that they know excatly how much competition there is and what they are competing against, but just don't have the imagination to di anything useful about it besides legal action and cosy up to the content providers ever tighter (if indeed they are not ultimately one and the same).

I'd also be curious as to how much of things like package-based offerings from TV companies are mandated by content providers. Anyone have an opinion?
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Anonymous Coward, 10 Nov 2010 @ 4:18am

Re: Little mikee's babble
dumbass dont know what cord cutting is, and has the audacity to call other people wrong.

thats really smart!
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abc gum, 10 Nov 2010 @ 4:31am

Re: Re:
"We're better off without ... the internet."

Wrong.
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abc gum, 10 Nov 2010 @ 4:36am

Re: Little mikee's babble
It's nice to see that you are still treating people with the upmost respect and in total absense of hypocrisy. Bravo.
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Anonymous Coward, 10 Nov 2010 @ 4:52am

We should do a bot to respond to people who deny certain things :)

http://www.popsci.com/science/article/2010-11/twitter-chatbot-trolls-web-tweeting-science-clim ate-change-deniers
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abc gum, 10 Nov 2010 @ 4:56am

Re: Really? Doubt it....
One way to help ensure that the market place does have competition is to vote with your dollars. I would rather pay a few extra dollars by using a smaller ISP than subsidize the large monopolistic alternatives via their "bundling". Comcast will charge for the ISP functionality regardless of your desires, whereas Qwest (and I assume other telcos) offer a "bring your own ISP" plan. I'm not aware of what options, if any, are available via Verizon.

AFAIK, the packaging of content is driven by the content providers. For example, the recent spats between News Corp and others. I imagine that this sort of thinking will dominate the future of such adventures by same into the ISP and content merged environment. I can hear it now ... ads telling me that I can save with a bundle of my favorites, including access to Google, BBC, and NewEgg.

Yes the future is bright and holds promise - maybe.
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ofb2632 (profile), 10 Nov 2010 @ 5:53am

forced
The reason why this is a bad thing is because if people leave cable for reasons of their own, its ok. If they are leaving by force (subscription raises) then it is a bad thing. Nobody likes being forced to do anything they don't want to.
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rec9140, 10 Nov 2010 @ 6:05am

No more mergers, period
This merger will do nothing but kill good content on USA like Royal Pains, Covert Affairs, and others..

NO THANKS!

Just keep your grubby hands to your self concrapcast!!

This will be bad no matter how you look at it... locking what content remains up..
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Susan Crawford, 10 Nov 2010 @ 7:05am

Merger matters because local cable monopolies OWN internet access
I've explained why the merger matters to the future of internet access in this country here: http://scrawford.net/blog/comcast-nbcu-forum-today-in-chicago/1372/ Local cable monopolies will be your only choice for video-quality speeds. The merger will make it possible for Comcast to raise barriers of entry to any competing broadband provider. As one key actor said to me recently: "Comcast owns the internet." Look beyond content to see how it can be used to exert control over the Internet. Susan
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Hephaestus (profile), 10 Nov 2010 @ 8:13am

Re: Re: Re:
He probably works for a record label or movie studio ...
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Hephaestus (profile), 10 Nov 2010 @ 8:26am

Speeding things up ....
In the quest for corporate profits in a diminishing market they will increase the cost of the channels. This will in turn cause more people to cut the cord. Which will cause them to increase prices even further. Rise lather repeat ...

They will then try to put caps on internet service which will be a fail as there will be a huge backlash from consumers. If they do place caps on downloads it will lead to higher prices and more companies and local municipalities entering the market. With Legal battles like the North Carolina's city of Wilson -vs- Time warner happening and eventual federal intervention openning up the broadband arena.

All in all it will lead to more consumer choice, lower costs, and the eventual failure of the cable monopolies. Thats a good thing.
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PRMan, 10 Nov 2010 @ 8:33am

Re: It's worse than you might think.
Without the internet, that's already true. How many stories are not picked up by the Big 4 Media companies until it's all over the internet? (Sony rootkit, for example)
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PRMan, 10 Nov 2010 @ 8:35am

Re:
If it got bad enough, a Sprint 4G unlimited card in a Linux server would be a very good option.

Also, if it gets bad enough, Google has a huge chunk of bandwidth with which they could become an ISP overnight.
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PRMan, 10 Nov 2010 @ 8:37am

Re:
"The competition would be crushed."

You had me up until this sentence. What competition? Oh, yeah, that's why they don't have competitive options, because you have nowhere to go anyway...
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Anonymous Coward, 10 Nov 2010 @ 8:55am

Who cares? I don't pay for cable and have no desire to watch it or pay for it. when I can get the channels I want to pay for, then I will consider it.
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Anon, 10 Nov 2010 @ 9:09am

Internet turning into Cable
It looks like the internet is going to turn into cable. ESPN3 was just the start. Content companies will begin charging ISP's so customers can access their content. ISP's will pay (just like with ESPN3), and pass those costs along to customers whether they customer wants those charges or not.

It won't be long before all the big dogs follow ESPN's lead and demand money from ISP's or close off their content.
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pringerX (profile), 10 Nov 2010 @ 9:15am

Internet options
I'm more concerned about the lack of Internet options. Most folks in the US only have access to one or two options (a single DSL and/or cable co.). There isn't any incentive for these corporations to improve their service and rates if there's no viable competition, and that's worrisome.
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BigKeithO (profile), 10 Nov 2010 @ 9:44am

Re: Merger matters because local cable monopolies OWN internet access
An actor said that?! Must be true. Don't forget that not everyone lives in the good old US of A, they internet still works outside of your borders last time I checked.
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Mike, 10 Nov 2010 @ 10:07am

The real facts on the ground
If a lot of people are "cutting the cord on cable" you wouldn't know it from new subscriptions to Comcast... it seems more people than ever are signing up and wanting DVR's and triple play packages. And Comcast has been working on upping the bandwidth and has a plan in place to distribute docsis 3 modems to all its customers because the speeds will be surpassing what can be provided on docsis 2 all around. Prices didn't go up though... The only reason people complain about comcast is because they are the "big guy". Their service is as good or better than any out there as far as reliability and customer service go.
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marak (profile), 10 Nov 2010 @ 1:05pm

A little to the left of this topic but its been bugging me. Here in aus we have whats called a VISP(virtual isp), for example i can rent bandwidth/connections off an existing supplier(or even isp with extra bandwidth) and rent that out to consumers at a fairly decent rate.

Surely you can do something similar over there - i just asked my isp who's supplying their bandwidth and they told me, then i contacted that company and voilla, im basicly ready to start it with me and a few mates.
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abc gum, 10 Nov 2010 @ 6:16pm

Re: Merger matters because local cable monopolies OWN internet access
Nice spam-o-gram there.

FYI - there is a large percentage of internet users who are not interested in your attempts to morph it into a content distribution platform.
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Anonymous Coward, 11 Nov 2010 @ 6:05am

Cord Cutting
I live with a Cable Cable employee. They work in marketing and sales and so they have a very direct involvement in the issue of Cord Cutters. This Company does know about Cord Cutters, but has given up on trying to prevent them leaving. The idea is that there will always be some that will never cut the cord until after the technology is long since dead. Focusing on squeezing out as much money as they can from those reluctant to change is the new strategy. Kind of like how there are still people who buy VHSs, just from thrift stores, garage sales, and online instead of the local store.
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abc gum, 11 Nov 2010 @ 6:55am

"trying to prevent them leaving. "

This mentality offends many people. A better way of stating this would be something like, "enticing them to stay".
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Anonymous Coward, 11 Nov 2010 @ 7:04am

Re:
Trying to prevent them leaving is the correct term though, as this IS the corporate mentality. Although I could use the other term used in most businesses "Reducing Churn". When the entity I'm speaking about changes the mentality, I will change the way I state it in reference.
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