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Comcast-Time Warner deal may impact broadband customers

Stephen Lawson | Feb. 14, 2014
Comcast's proposed acquisition of Time Warner Cable is partly a grab for negotiating power in the fast-changing video content business, but it might affect broadband users, too.

One factor that could shape broadband service is Comcast's bargaining power when making peering agreements, the deals under which core network providers get access to the edges of networks, said Derek Turner, research director at the consumer rights group Free Press. In 2010, Comcast had a content delivery dispute with one such company, Level 3.

Caps on the amount of data that subscribers can use per month, which Comcast is starting to introduce, could also hurt consumers, Turner said.

Comcast's Cohen wouldn't speculate about the deal's effect on broadband services, saying it was too early to say. Asked about monthly data caps, he said the technique is still in trials and only a small minority of Comcast customers are under them. It's not clear where Comcast's trial will be at the end of the year, when the deal would close, he said.

Likewise, he said the effect on prices would be hard to quantify, though merging the companies should cut some costs internally.

"We're certainly not promising that customer bills are going to go down or even that they're going to increase less rapidly," Cohen said.

Comcast's focus in the plan is squarely on video, said Roger Kay, principal analyst at Endpoint Technology Associates. It wouldn't make such an acquisition to grow its pure broadband business, he said. The cable companies face competition in that area from fiber-based services such as AT&T's U-verse and Verizon's FiOS, as well as from fast mobile networks. Those rivals are also competing on the content front, because like Comcast, they fear being beat out by a cheaper bandwidth alternative, he said.

"All of these guys have been trying not to be relegated to just being pipes," Kay said.


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