Boston College Experts: Comcast - Time Warner Merger
Comcast Cable’s proposal to buy Time Warner threatens to shake-up the already shrinking cable TV landscape and will draw close attention from anti-trust regulators given it will create the nation’s largest provider of television channels and Internet services.
ASSOCIATE PROF. BRIAN QUINN
BOSTON COLLEGE LAW SCHOOL
(617) 552-2202 (office)
(617) 833-9423 (cell)
“The anti-trust spirit is much more aggressive than it has been in the past and this is the kind of transaction that will receive lots of scrutiny because it involves the number one and the number two in the industry. The Department of Justice and the FCC will be looking at this for a long time.”
“The game that’s going to play out is going to look like this,” says Quinn, an expert in corporations, mergers, and acquisitions. “The government is going to say, 'Hey look, this is the number one and number two cable companies in the country getting together to create a behemoth. Does that have anti-competitive effects? Does it have negative effects for consumers? That will be the basis of their investigation.
“Comcast and Time Warner, they're going to say something like this: 'What do you mean number one and number two? You've defined the market incorrectly. Don't you know that nobody watches television anymore? It's all about the internet. Our competitors aren't other cable companies - our competitors are Verizon, our competitors are DirecTV, our competitors are AT&T, all these Internet service providers because the relevant market isn't TV, the relevant market is entertainment generally and it's a very fierce competitive market.'”
“The first argument is going to be what is the proper market the government should be analyzing,” says Quinn. “And clearly Comcast is going to argue for a much broader definition and the government is going to be looking at a much narrower definition.”
Quinn is an expert in corporations, mergers & acquisitions, and deals. Professor His research focuses on corporate law, mergers & acquisitions, and the structuring of transactions. Prior to entering the teaching profession, Professor Quinn was in private practice, representing public and private technology clients in merger and acquisitions transactions. In addition to academic writing, Professor Quinn blogs on current deals and legal developments related to mergers & acquisitions at the M&A Law Prof Blog (http://lawprofessors.typepad.com/mergers/). Professor Quinn has been widely quoted by a multitude of media entities, including The New York Times, Wall Street Journal, Financial Times, Boston Globe, Reuters, AP, Dow Jones Newswires, Bloomberg, Bloomberg TV, and The Business Insider.
ASSISTANT PROF. DANIEL LYONS
BOSTON COLLEGE LAW SCHOOL
(617) 899-4813 (cell)
As the details of the Comcast-Time Warner $45 billion dollar deal filter out, most wonder how this mega-merger will affect consumers. But the Federal Communications Commission will also be looking at the concept known as “monopsony,” the idea of increased buying power between the combined entity and content providers.
“The idea is that a combined Comcast-Time Warner endeavor can get better pricing for TV shows and movies and channels,” says Lyons, an expert on the FCC. “And so the FCC may not be concerned about the merger increasing market power against customers but they are concerned about increased buying power the other way up the chain. It’s potentially bad for studios and television producers and the companies that make the content. Comcast will argue that negotiating lower prices for content ultimately benefits consumers. And it will, if they pass along some of those savings to consumers.”
“There’s traditional net neutrality concerns that because Netflix competes against cable for viewers, that Comcast might use its control of the Internet pipes in order to make it harder for Netflix to compete against traditional cable. And so a bigger Comcast may have incentives to engage in such behavior,” says Lyons, who has participated in rulemaking proceedings before the FCC. “Interestingly, although the broadband industry is no longer bound by net neutrality rules, Comcast still is because Comcast voluntarily agreed to net neutrality as a condition with its merger with NBC. Comcast points out that because of this condition, the merger benefits consumers because more broadband consumers will be covered by that merger condition, at least through 2018, which is when that merger condition expires. I anticipate the FCC, as part of its approval, will seek to clarify that the net neutrality rules apply to former Time Warner customers and they’ll probably try to push that 2018 date out a little bit more.”
“I think generally the future of video is not cable company against cable company or even cable company against satellite,” says Lyons. “It’s basically traditional cable against Internet based video and so I’m not surprised to see Comcast strengthening its position in the market for content and customers, getting ready for increased competition with Netflix and other Internet based providers.”
Professor Lyons is an assistant professor at Boston College Law School who specializes in the areas of telecommunications and Internet regulation, administrative law, and property. He is a frequent contributor to several blogs focusing on the intersection of law and technology, including TechPolicyDaily.com. Before joining the faculty, he practiced energy, telecommunications, and administrative law in Los Angeles. Professor Lyons has participated in proceedings before both the Federal Communications Commission and various state public utilities commissions.
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