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Netflix Rebuffs Comcast TWC Merger


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Netflix has come out and announced they’re joining a list of companies that are filing to rebuff the Comcast Time Warner merger. The current proposed merger between Comcast and Time Warner Cable is worth about 45 billion dollars and would allow two of the four biggest cable and internet providers to have a sizable control over the industry as Netflix is trying to convince the Federal Communications Commission. Netflix has submitted a 256 page document outlining why a merger between two of the nation’s largest internet and cable provider would not only be harmful to the rest of the industry but to the consumer population as well.

The Netflix Comcast Relationshipnetflix 1

Netflix and Comcast have had a prior relationship with each other even before the merger was announced. The relationship between Netflix and Comcast has been strained from almost the start. Comcast had demanded that Netflix pay the company what is coined as a terminating access fee so that customers weren’t exposed to a degrading signal. This type of charge has widely been seen by Netflix as a move to extort the company by threatening its customer base. Netflix is one of the largest online video streaming companies, which relies heavily on the signal strength and quality of internet providers. Netflix has expressed concern in the past with the performance of Comcast and how the company would bully other competitors that are so reliant on their services. Unlike a cable subscription which is harder to terminate a contract with due to local providers and possible lack of quality, Comcast sits on the upper hand where Netflix risks easier membership subscription cancellations. While Netflix remains one of the top online video providers, it is only as convenient to their customers as the internet providers that relay signals to consumer hardware.

Comcast and Time Warner Cable

Comcast has stated publically that there is no cause for concern should the two companies be allowed to merge because neither company overlaps in terms of service. Comcast and Time Warner Cable are two of the nation’s four largest cable and internet providers which are seeking to solidify their place in the industry by combining two very well established histories and entrusting their place within the market. Netflix has argued that this type of merger will only have destructive results both inside the industry when it comes to competition as well as how these companies will treat their customers. Netflix has even gone as far as citing in their 256 page document that AT&T and MediaOne part with a significant segment of their broadband business before the companies were allowed to go ahead with a merger that occurred roughly 14 years ago. With AT&T and MediaOne, the concern had been due to the amount of industry control giving what would become one company more singular control than any of its competitors. Netflix feels that a Comcast Time Warner Cable merger now, would pose that same destructive power towards any competing company that like Netflix was subjected to extortion in an effort to keep customers.

The Federal Communications Commissionnetflix 2

The Federal Communications Commission (FCC) will eventually make a decision on the legitimacy or legality behind the merger. In the meantime there are vary results being voiced both within the industry itself as well as consumer feedback on the still possible merger. Unlike Netflix which has proven a rocky relationship with Comcast; there are other companies that like Netflix provide the same if not similar services and are in fact in favor of the possible merger. Comcast has received roughly 400 supportive comments from consumers and about 80 chambers of commerce and companies have all voiced their support of a merger between the two companies. Such companies like Tivo and Cisco are all coming forth publically to show their support of the merger, deeming it would be a great move for those businesses and their bottom lines. The FCC’s comments deadline has now passed and Netflix filing their concerns just under the wire. Even though the forum for comments either in support or against the merger is done with, the FCC still has to evaluate the legitimacy and legality behind the possible merger.

The public relations wars between Comcast, Time Warner Cable and Netflix will continue to rage on as the FCC enjoys the luxury of time to best evaluate the situation and the possible ramifications of their decision. Netflix spokesmen are confident that their document will raise significant concern within the FCC that will contribute to the merger to be shut down boasting that every question raised was countered in the document. Now it is only a matter of time to see how the FCC and the various companies involved on either side have stated and defended their positions.

 

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