May 27, 2014 / 3:00 PM / 3 years ago

U.S. should reject Comcast-TWC merger - NY Times editorial

WASHINGTON, May 27 (Reuters) - U.S. regulators should challenge the proposed $45 billion merger of the two largest American cable providers, Comcast Corp and Time Warner Cable Inc, the New York Times said in an editorial in Tuesday's newspaper.

The editorial, headlined "A Cable Merger Too Far," said there were good reasons for the Justice Department and the Federal Communications Commission to block the proposed purchase of Time Warner Cable by Comcast. The Times cited limited competition in the high-speed Internet market and Comcast's negotiating power with Web content companies and TV programmers.

"The merger will concentrate too much market power in the hands of one company, creating a telecommunications colossus the likes of which the country has not seen since 1984 when the government forced the breakup of the original AT&T telephone monopoly," the editorial said.

"By buying Time Warner Cable, Comcast would become a gatekeeper over what consumers watch, read and listen to."

The Federal Communications Commission is reviewing whether the merger is in the public interest, and the Justice Department will decide whether it complies with antitrust law. Public interest groups and some legislators have opposed the combination.

Comcast has argued that its business faces powerful competitors like Google Inc or wireless carriers like AT&T Inc, and has stressed that Comcast and Time Warner Cable do not directly compete in any market.

AT&T, the No. 2 wireless carrier, has proposed buying the largest U.S. satellite TV company, DirecTV, for $48.5 billion, which the Times said only increased concerns about Internet and TV market consolidation.

A Washington Post editorial in April said regulators should approve the Comcast-Time Warner Cable merger, but with conditions.

However, the Times said conditions, such as requiring the merged company not to give favored treatment to established content providers like Netflix, may not be enough.

" ... This merger would fundamentally change the structure of this important industry and give one company too much control over what information, shows, movies and sports Americans can access on TVs and the Internet," the newspaper said.

"Federal regulators should challenge this deal."

To read the editorial, click here: (Reporting by Alina Selyukh; Editing by Jonathan Oatis)

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