If you’re a Comcast or Time Warner Cable customer, you’re probably thinking, how will this affect me?
The answer: probably not in a good way.
There wil be less choice, prices will go up, data caps will get worse, and the cable industry’s top lobbyist is the former chairman of the FCC, according to people who follow the TV business closely. So don’t get your hopes up as a consumer, in other words.
Here’s how it might play out:
First, it will reduce competition. There will be a fewer cable companies for consumers to choose from, and more areas where Comcast/TWC is the only practical choice for many subscribers. Here’s a chart showing which cities would come under the new Comcast/TWC umbrella, from analyst Rich Greenfield of BTIG.
From that point, the fear is that prices will go up, according to the Wall Street Journal:
“This transaction is dangerous for broadband competition and would likely inflate consumer prices. Antitrust officials and regulators need to scrutinize this deal carefully and prevent harm to consumers and the competitive process,” said Gene Kimmelman, a former Justice Department antitrust official and chief executive of the open media advocacy group Public Knowledge.
With 33 million customers, the new company will be the biggest broadband provider in the U.S., “and perhaps the largest outside China,” according to GigaOm.
Prices have, in fact already gone up. Expect to pay about $US150 on average:
At end of 2013, Comcast’s estimated average revenue per user (ARPU) of around $US151.30 a month, while Time Warner Cable’s ARPU was around $US148.70 a month, according to UBS.
Here’s a chart showing those price increases, from NPD:
At the same time, cable companies want to cap your bandwidth, or restrict the total amount of stuff you download from the internet — like video — at high speed. Both Comcast and Time Warner want these “data caps,” according to DSL Reports:
Following on the heels of a similar offering by Time Warner Cable, Comcast has launched a new trial in Fresno that involves usage caps as low as 5GB a month on the company’s Economy Plus broadband tier. The company’s website and FAQ list the new plan as a “flexible data option,” and as with Time Warner Cable’s efforts — users are promised a $US5 discount off of their monthly bill if they’re willing to have their broadband line capped at a paltry 5 gigabytes per month.
Although Time Warner has had less luck in getting those caps to stick:
After Time Warner Cable took a public relations beating for pushing mandatory low caps (as low as 5 GB) and high per byte overages (as high as $US5 per additional gigabyte) on consumers back in 2009, the company has been stepping very carefully in what is quite obviously their relentless desire to charge consumers broadband overages. Early last year their metered billing option returned to a few tiny markets as a voluntary (for now) option named “Essentials.”
Congress and the FCC may require the new company to continue offering high or unlimited data caps in some places, for old TWC customers:
In the broadband market, regulators could ask Comcast to continue offering Time Warner Cable subscribers an unlimited bandwidth plan, as opposed to the capped data plans increasingly offered by broadband providers. In a nod to regulators’ concerns, Comcast is likely to extend its net neutrality agreement to newly acquired Time Warner subscribers, and to extend the Comcast Essentials program, which provides subsidized Internet access and computers to low-income students and their families.
But don’t bank on that. One of the cable industry’s main lobbyists is the former chair of the FCC — the very agency charged with regulating broadband data caps.
Here’s a chart from GigaOm showing which cable companies are restricting their users’ bandwidth by price.
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