Comcast is trying hard to convince federal regulators that it needs to buy Time Warner Cable so it can compete with the likes of Google, Netflix and Apple.
Too Big to Shrink Your Cable Bill
Comcast tells Washington it needs to get bigger -- but even then it won’t have enough power to fight those dastardly programmers.
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Peter Kafka covered media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.
But Comcast also has to convince Washington that once it gets bigger, it still won’t be able to do that much.
For instance, Comcast’s filing with the Federal Communications Commission today spends quite a bit of time arguing that it can’t do anything about rising programming costs. After all, it argues, it’s already the country’s biggest pay-TV company, and programmers have been jacking up their rates for years (granted, Comcast now owns a programmer, too*).
Getting bigger won’t change anything, the company insists:
“With 22 million customers, Comcast is a significant [pay-TV provider] in programming negotiations, and it seems unlikely — as a real-world matter — that the addition of 8 million (or even 11 million) more customers creates any truly new bargaining power that will somehow tip the scales in a dramatic fashion against either large or small programmers.”
The problem with this argument is that lots of powerful pay TV executives and investors have been calling for consolidation precisely so bigger TV providers can get more leverage against programmers, so they can help tamp down costs.
And since Comcast doesn’t want to completely wave them off, it offers a little out clause, almost as an aside: “It is possible that the combined company may be able to realize some programming cost savings by combining contracts in certain cases.”
So, maybe it could do a little something, someday. The more realistic version of this argument would run something like: “Our big programming deals run seven years or more. So even if we do get a chance to flex our muscle, you’re not going to see the results for years.”
* Comcast owns NBCUniversal, which is an investor in Re/code’s parent, Revere Digital.
This article originally appeared on Recode.net.
