Your Media Merger Update
April 27, 2016 2:19 AM   Subscribe

Almost exactly a year after rejecting the merger of Time Warner Cable and Comcast, both the FCC and the Justice Department have given their blessing to the marriage of TWC and Charter. As first reported by the New York Times*, the New Charter - or Time Charter or Charter Warner or Charter Time Warner Bright House (because there's a third much smaller partner - it's complicated) will become about as big as Comcast, and be operating under restrictions, like NO data caps, usage-based pricing or peering fees (for seven years).
But The Company Known On 30 Rock As Kabletown hasn't been doing nothing since their mega-cable merger was squashed...

A day after this other deal was approved, Comcast apparently is offering over $3billion to buy DreamWorks Animation SKG, as first reported by the Wall Street Journal*. Of course, this probably won't require any regulatory approval even though they already own a feature animation studio as part of Universal Studios, the entertainingly despicable Illumination Entertainment. Dreamworks' desire to get bought out has been a continuing story (Among other complications, Hasbro backed off from a deal with Dreamworks when Disney threatened to cut off Hasbro's licensing deals for its properties). Questions remain: will Dreamworks and Illumination remain separate (like Disney & Pixar) or will the Minions have to learn How to Ride Dragons? And will they finally drop from their name the now-meaningless "SKG" (initials of the 3 founders, only one of which is still involved with the company)?

*additional links provided for those of you unhampered by NYT or WSJ paywalls, while the original Consumerist links are for those of us who don't WANT to be exposed to NYT or WSJ.
posted by oneswellfoop (38 comments total) 14 users marked this as a favorite
 
"This is fine."
posted by DoctorFedora at 4:12 AM on April 27, 2016 [3 favorites]


The no data cap restriction on Charter/Time Warner is interesting. Data caps are why we left Comcast. Fortunately, we live in a market with choice of two cable providers.
posted by LoveHam at 4:37 AM on April 27, 2016 [1 favorite]


You live in a market with a choice of two cable providers... FOR NOW.
posted by cristinacristinacristina at 5:01 AM on April 27, 2016 [32 favorites]


While both mergers would have/will suck(ed), is there any real/non-bullshit reason given for why TW+Charter >>> TW+Comcast?
posted by kuanes at 5:10 AM on April 27, 2016 [1 favorite]


I've been pleased with Charter, and prefer it over Comcast. Comcast has been hitting the news for years for pulling bullshit stunts, but as a charter customer, things have been pretty straightforward.
posted by rebent at 5:27 AM on April 27, 2016


kuanes:
"While both mergers would have/will suck(ed), is there any real/non-bullshit reason given for why TW+Charter >>> TW+Comcast?"
Competition. It's kind of moot at this point, but it's something.
posted by charred husk at 5:29 AM on April 27, 2016 [1 favorite]


If the merged Time-Warner-Charter is about the same size as the unmerged Comcast, it would probably be hard to justify kiboshing the TW+Ch merger while allowing Comcast to exist unmolested. Assuming size was the only consideration, which it probably wasn't.

We need another Bell-style breakup, but hopefully one that sticks this time. And we probably need to further separate backbone from last-mile services if we want to see real competition between providers.
posted by tobascodagama at 5:40 AM on April 27, 2016 [7 favorites]


Sometimes I think that Americans on the left are really, really missing an opportunity by not using cable companies as a way to rile people up about the regulation of businesses/corporations.
posted by Kutsuwamushi at 5:55 AM on April 27, 2016 [21 favorites]


Sometimes I think that Americans on the left are really, really missing an opportunity by not using cable companies as a way to rile people up about the regulation of businesses/corporations.

the horse is so far out of the barn wrt "regulation of businesses/corporations" that they've knocked down the barn and started building condos. i say leave Comcast/TimeCharter as a monument to how much capitalism sucks.
posted by ennui.bz at 6:18 AM on April 27, 2016 [2 favorites]


I saw recently that Verizon got out of the fiber optic business, selling to Frontier. Nobody can compete with Cable for broadband. They gobbled up the business that was supposed to bring competition to the news/sports/entertainment mass distribution space.

If there's an industry that need disrupting, it's the cable/broadband business.
posted by notyou at 6:23 AM on April 27, 2016 [4 favorites]


I'm trying to research this but it's not as easy to find as you'd think - how do other countries handle the internet service market (I'm ignoring cable TV, it's not nearly as important)? The barrier to entry must be pretty high everywhere (though admittedly we're a larger country than most) - is there anywhere that is it provided as a government service/public utility? How has that worked out? Do many countries have regulations that are fundamentally similar to the US, or more providers in competitive markets?
posted by R a c h e l at 7:10 AM on April 27, 2016 [2 favorites]


While both mergers would have/will suck(ed), is there any real/non-bullshit reason given for why TW+Charter >>> TW+Comcast?

TW+Comcast = 1 DoubleMegacorp vs. 1 Midsize corp

TW+Charter = 1 Megacorp vs. 1 Megacorp
posted by sparklemotion at 7:16 AM on April 27, 2016 [2 favorites]


The issue isn't the size, its the regulation. Provision of Data Services is a natural monopoly and should be regulated as such.
posted by JPD at 7:22 AM on April 27, 2016 [5 favorites]


Not only a natural monopoly but many of the providers were the result of government-granted monopolies.
posted by gyc at 7:49 AM on April 27, 2016 [6 favorites]


Dreamworks has a gorgeous campus and I'd hate to see it sold or abandoned.
posted by infinitewindow at 7:49 AM on April 27, 2016


Speaking as a Time-Warner customer...

Well, fuck.

Speaking as a Time-Warner customer who is also an ex-Comcast customer (back when I lived in Philadelphia)...

Well, fuck, but it still won't be as bad as Comcast.
posted by SansPoint at 8:08 AM on April 27, 2016


One of the few good things about living in a rural area, my cable/Internet provider is the rural phone coop. Megacorp doesn't give a damn about acquiring us.
posted by Ber at 8:18 AM on April 27, 2016 [1 favorite]


Provision of Data Services is a natural monopoly and should be regulated as such.

in order to do this you would have to expropriate the fuck out of Comcast ie. carve out NBC... welcome to the Party, comrade.
posted by ennui.bz at 8:22 AM on April 27, 2016


nah. Its not really that hard - lots of regulated entities have un-regulated entities under the same holdco. Legally NBC and comcast are already different entities controlled by the same holdco.

There is precedent as well with the regulation of electric utilities. If the broadband guys were smart they'd welcome a guaranteed double-digit ROE on their investments.
posted by JPD at 8:25 AM on April 27, 2016


More good news for democracy and the free market.
posted by entropicamericana at 8:56 AM on April 27, 2016 [2 favorites]


If there's an industry that need disrupting, it's the cable/broadband business.

Disrupting the cable/broadband business is trivial in theory. Unfortunately, complete regulatory capture trumps innovation and disruption every time.

Increased regulation of an industry turns out to be a two-edged sword. The more strictly an industry is regulated, the more power the dominant players gain when they capture the regulators. Try and create some kind of infrastructure that would compete with Verizon, Comcast et al. See what happens. *

*Unless you're Google, of course, and Google Fiber is really more significant as proof that Google is big enough to play in the same league as Verizon and Comcast than it is as disruption per se. It's pretty much the same business model. The differentiator is just that Google, so far at least, is less monstrous.
posted by Naberius at 8:58 AM on April 27, 2016 [2 favorites]


> (though admittedly we're a larger country than most)

Which counts for what, exactly? Rural telephone access aside (which doesn't apply to cable TV), you would expect major metropolitan areas to have the same level of competition owing to density there. New York City and San Francisco actually do have tiny regional ISPs that service very select areas with high speed 100 Mbit or even gigabit access, but get even a tiny bit out (ie Oakland or Brooklyn) and if you're unlucky, you're back to a choice of the local cable monopoly for broadband - Time Warner in Brooklyn or Comcast in Oakland.

This proves that local competition is possible at the upper end of what's considered dense for the US, but for some strange reason, it's like Comcast and Time-Warner aren't actively competing with each other, and are content to divvy up the US, so having a choice between two companies is at least a choice - most don't have even that.

Tom Wheeler's FCC is pushing in the right direction, and is trying to use the FCC to allow cities to be able to run their own municipial broadband. This would let cities run Internet service like water or garbage, and greatly improve competition. Unfortunately Congress, led by Ted Cruz is pushing against him, in what is sure to be played up as a states rights issue instead of Comcast and Time-Warner buying a few Senators because they no longer have regulatory capture of the FCC.

Another big thing Tom Wheeler has done is redefine broadband to be 25 Mbit, raising it from the old definition of 4 Mbit. This excludes long-run DSL, so many places actually have the choice of only Comcast or Time Warner for what is now defined to be broadband. Verizon has been selling off the FiOS business, and AT&T's U-verse is either DSL over telephone wires to the closest DSLAM which is too slow on long runs, or VDSL to a local fiber drop (FTTC), which is expensive and has only limited deployment.

The history of the situation is very important, as our laws struggle to keep up. Telephone wires are demonopolized, meaning it's possible to start up an ISP serving DSL via customers, and make a modicum of money off of it, and there are a number of smaller ISPs doing just that. Sonic.net and Earthlink, along others, but this may no longer qualify as broadband.

Unfortunately, the cable TV lines aren't similarly demonopolized, meaning Internet service over cable TV lines is also not demonopolized, leading to the current situation between cable companies.

The Bell breakup was good, but didn't go far enough - if there are two companies with a gentleman's agreement not to compete for certain states, the duopoly is just as harmful as any monopoly, which is essentially what exists outside a few select areas.

An interesting wrinkle is that LTE cellphone service is fast enough (but again, only in select areas) to count as broadband by the FCC's definition, so while there are obstacles there (many cellphone plans limit total monthly data), it's not as big an obstacle as having to run a new set of wires to every single house in the US.
posted by fragmede at 9:00 AM on April 27, 2016 [6 favorites]


This will be a very interesting merger to watch, as my husband is a network engineer for Charter but my parents just spent OVER TEN MONTHS trying to get Comcast to service their house in a semi-rural area.

Charter actually has way more to deal with than just providing cable and internet. They work a lot with wireless providers, including Verizon and T-Mobile, all over the country.

So... we'll see.
posted by St. Hubbins at 9:19 AM on April 27, 2016 [1 favorite]


Its not really that hard - lots of regulated entities have un-regulated entities under the same holdco. Legally NBC and comcast are already different entities controlled by the same holdco.

but how much shareholder value would you be wiping out? the acquisition of nbc is about creating a vertically integrated content and delivery corp., same reason Verizon is thinking about Yahoo. if you are serious about making "delivery" a utility, it would completely change the valuation...

telephone wires are demonopolized...

which is why Verizon is trying to create a fait accompli wrt the 1934 telecommunications act by refusing to maintain its copper wire network.
posted by ennui.bz at 9:29 AM on April 27, 2016


Increased regulation of an industry turns out to be a two-edged sword. The more strictly an industry is regulated, the more power the dominant players gain when they capture the regulators. Try and create some kind of infrastructure that would compete with Verizon, Comcast et al. See what happens.

Seattle gets a mayor bought out by campaign donations from Comcast, and municipal gigabit projects are subsequently terminated?
posted by a lungful of dragon at 9:33 AM on April 27, 2016 [4 favorites]


Seattle gets a mayor bought out by campaign donations from Comcast, and municipal gigabit projects are subsequently terminated?

Wasn't aware of Seattle Gigabit, but I'm surprised this project actually got to the point where Comcast had to buy a mayor to kill it. When I was covering this kind of stuff, the tactic would simply have been to get it outlawed at the state level.
posted by Naberius at 11:28 AM on April 27, 2016 [2 favorites]


but how much shareholder value would you be wiping out? the acquisition of nbc is about creating a vertically integrated content and delivery corp., same reason Verizon is thinking about Yahoo. if you are serious about making "delivery" a utility, it would completely change the valuation...

A utility that owns a wires (T&D) business with deregulated supply and generation business is pretty much exactly that.
posted by JPD at 11:54 AM on April 27, 2016


The new name will be Mega Giant Evil Corp and the ad campaign will be Yeah, but at least we're not Comcast.
posted by theora55 at 12:58 PM on April 27, 2016 [3 favorites]


I'm trying to research this but it's not as easy to find as you'd think - how do other countries handle the internet service market (I'm ignoring cable TV, it's not nearly as important)? The barrier to entry must be pretty high everywhere (though admittedly we're a larger country than most) - is there anywhere that is it provided as a government service/public utility? How has that worked out? Do many countries have regulations that are fundamentally similar to the US, or more providers in competitive markets?

This is kind of my job, but from a Toronto perspective. Here in Canada we have a kafakaesque scheme of regulated/tariffed access to incumbent networks. It works, barely. You can read all about it in the Canadian Broadband forums at DSLr.

Six years ago, ArsTechnica had a great look into how Amsterdam does it. I refer to the Amsterdam Model as shorthand pretty regularly. The UK has very successfully implemented Operational Separation, or Functional Separation, which created Openreach. This is probably a consequence of the European Union entrenching some form of separation of telecom companies in law. Australia is trying a controversial public utility model that I don't know much about. It might be costing too much money?

In addition to the Amsterdam Model article linked above, the City of Calgary wrote an absolutely fantastic letter in opposition to Bell's attempt to protect their monopoly on FTTH infrastructure. The letter does a great job of breaking down the real world issues involved in serving data to consumers from infrastructure to content.

but how much shareholder value would you be wiping out? the acquisition of nbc is about creating a vertically integrated content and delivery corp., same reason Verizon is thinking about Yahoo. if you are serious about making "delivery" a utility, it would completely change the valuation...

The idea that law makers and regulators should be beholden to shareholder value is fundamentally reprehensible. That said, long term shareholder value would probably go up as the result of a break up. You do it like this.
posted by Chuckles at 1:31 PM on April 27, 2016 [5 favorites]


Ugh, I just signed up with Comcast so hopefully a larger Competitor will make them behave. We've used for cable TV for a while. We have a fancy Tivo box (premier XL4 I think?) that needs cable and we really like the Tivo.

I had Centurylink DSL for internet for the last three years and it's been great. The problem is that I was paying $50/mo for 12mbps down/1kbps up. I work from home so any time I saved something to a network drive it would take forever. I could have upgraded my download speed to 20mbps but I'd still be stuck with the same upload rate and even the download speed was starting to become an issue. It would take Netflix a solid 2 minutes to buffer enough to go from 240p to full HD.

So now I've got Comcast internet and I'm paying $90/mo for TV AND internet (which is what I was paying for just TV before) for the next two years at 150mbps down/12mbps up. I NEED that speed to do my job, I NEED internet access for a bunch of other things (such as being an adult in 2016) and it's so much more convenient than other options for a host of other things that those other options may as well not exist. Pretty soon, that basic 12/1 DSL speed is going to be about as useful as a dial-up connection. You can still use it for basic and simple things, but you're not really accessing the same internet that the rest of us are.

I'm hoping that, after our Comcast contract is up, we'll be in a position to move. When we've been looking at houses, access to high speed internet (and how high that speed is) has absolutely been a factor in which areas we consider. CenturyLink and a local company called US Internet are both building out fiber networks here to offer 1gig speeds (and praise the gods it's symmetric!) and I told CenturyLink that I'd be knocking down their doors, money in hand, to sign back up as soon as I can get 1gig fiber. I'd gladly pay more for my service to be able to deal with "not Comcast" but I really do need that extra speed.

The internet is a damn utility, it's high time we started regulating it like one.
posted by VTX at 1:32 PM on April 27, 2016 [1 favorite]


I regularly play video games with a network engineer in Perth, Australia. According to him, the Federal government owns and operates most of the back-bone infrastructure, the ISP's build out the networks from there.

From his perspective, it works pretty well. I get a sense that there is a fair amount of competition between ISPs and they try to differentiate themselves with how they structure their plans and service quality can be different between companies based on the decisions they've made about how to structure their network. He seemed to think that his company was a lot more successful because they do a better job of managing and building their network so they get more up-time and faster speeds more consistently. So FWIW, it sounds like it works pretty well for the customers and the scheme lines incentives up so that free market economics ends up working the way it should with positive outcomes for the consumer.
posted by VTX at 1:40 PM on April 27, 2016 [2 favorites]


Well, from my experience, I moved from L.A., where Time Warner had just consolidated all the companies providing cable to the various suburbs, up the coast to a Charter "market" at the time it was mostly owned by Paul "the less evil founder of Microsoft" Allen (now less so). It's been ten years of slowly improving Internet (I'm now getting 65mbs with an advertised 60mbs), pretty good reliability (considering I'm in the semi-boondocks of a smaller market) and creeping-upward prices semi-offset by being able to get Customer Service to give me the "promotional price" three times. As Consumerist reports, Charter's service has only been marginally better than TWC for most folks, but it's been pretty acceptable to me.

The thing about Time Warner Cable is that it was split off of the rest of Time Warner Media Conglomerate several years ago, making its name rather misleading and making Comcast the only major cable company that also owns content providers - primarily NBC and Universal Studios, which is why I thought the second part of my post was relevant, about Comcast buying DreamWorks and the timing of the "leaked news". Also notable is that DreamWorks has recently had less success in its theatrical releases than in making series for TV... a lot of it currently distributed by Netflix, which Comcast considers Public Enemy #1 or #2 for its business model. Comcast already owns Sprout, a cable channel for children acquired from PBS and they'd love to have more in-house provided content there, maybe renaming it The DreamWorks Channel (remember, these ARE the same people who thought SyFy was a good name and less science fiction content was a good idea). Anyway, with a lot of "de-mergering" of media entities in recent years (Warner also splitting from Time, Viacom spinning off CBS, NewsCorp separating Fox but with too much Murdoch control over both), Comcast is the Biggest Consolidator these days (Disney a distant 2nd, but what they've done with Marvel and Lucasfilm, whew). If you ignore the ramifications of concentrated ownership, the Media Musical Chairs Game is more fun to watch than any Reality TV show.
posted by oneswellfoop at 2:48 PM on April 27, 2016 [3 favorites]




As long as they wrap up How to Train Your Dragon I'm fine with whatever they decide to do with the film franchises.
posted by Small Dollar at 11:49 PM on April 27, 2016


"How to Train Your Dragon 3" is officially in production, but its release date has been pushed back to June 2018. It's the last of 6 productions currently in the pipeline, preceded by "Trolls" coming this November ("based on the Troll dolls", but before you let out a sigh of relief, check out the first teaser trailer), "Boss Baby" ("loosely based on a picture book of the same name"), "Captain Underpants" (based on, well, you know...) and "The Croods 2" in 2017 and "Larrikins" ("directed by and starring Tim Minchin") in February 2018. At least a couple of these productions have the potential of mass destruction, but if Illumination picks anything out of the wreckage, it's likely to be Toothless and Hiccup. And considering what is in "development hell" afterwards, the death of Dreamworks Animation may be a mercy killing.
posted by oneswellfoop at 12:37 AM on April 28, 2016


Australia is trying a controversial public utility model that I don't know much about. It might be costing too much money?

As originally proposed by the previous Labor Government (centre-left), the National Broadband Network would have supplied fibre-to-the-premises connections to every household in every Australian city and major town, high speed wireless to tiny towns where fibre-to-the-premises was just stupidly non-cost-effective, and satellite to places where even wireless wouldn't go. Essentially, what Labor was trying to do was re-nationalize the nation's comms infrastructure without having to admit that selling off Telstra was something they should have fought harder to prevent.

The original arsepull cost estimate for that was AU$43B. Of course that would have blown out, probably to about double that, but fibre to the home is such a compelling improvement over what most Australians have already that it would have started funding itself within a couple of years of the rollout getting started. Fibre being what it is, the most expensive parts of the network (tunnels and pits) would also have needed no upgrades and scarcely any maintenance for decades.

NBNCo was envisaged as a monopoly carrier that would sell wholesale to internet service providers, who would then onsell it to customers. There was never a plan for NBNCo to deal directly with network end users. Because today's Labor Party is but a piss-ant shadow of its former bolshie self, the aim was to sell NBNCo off to the private sector once it was up and running.

When the farcical Abbott conservative Government replaced the shambolic Labor administration in 2013, they shot this plan all to shit. Abbott had been campaigning relentlessly against NBNCo from the get-go, arguing that it was too expensive. On achieving office and finding that the NBN actually had considerable public support, he instructed Communications Minister Malcolm Turnbull (who has since supplanted him as Prime Minister) to get together with a bunch of mates who run the existing Australian ISPs (Malcolm having chaired OzEmail in the late 1990s) and hash out a cheaper replacement plan.

That's what's currently being rolled out. Instead of fibre to the premises we get fibre to the node, and there's a heavier reliance on fixed wireless even in some quite large towns. Abbott and Turnbull claimed that they could do the whole lot for AU$26B instead of $43B. This was always clearly bullshit - you don't save time or money with that big a change of project direction half way through - but the Press bought it and now we're stuck with this substandard mishmash that will have to get patched and prodded and fiddled with for another two generations before it even comes close to paying for itself. At which point, having cost the taxpayer many billions, it will undoubtedly be sold off at firesale prices to the crony of the day.
posted by flabdablet at 5:04 AM on April 28, 2016 [1 favorite]


NBNCo was envisaged as a monopoly carrier that would sell wholesale to internet service providers, who would then onsell it to customers. There was never a plan for NBNCo to deal directly with network end users.

That's the ideal, in my opinion. A single public utility operator is unlikely to offer the full range of services edge case customers will want. In addition, they'd take a lot of blame for entertainment related stuff which is best left for the private sector to figure out.

Because today's Labor Party is but a piss-ant shadow of its former bolshie self, the aim was to sell NBNCo off to the private sector once it was up and running.

What a horrible idea.. Run it as an arms length organization, sure, but you can't sell it. Thanks for the post flabdablet!
posted by Chuckles at 11:01 AM on April 28, 2016


It's official... Comcast Acquires DreamWorks For $3.8B. More than originally reported (and close to what Disney paid for Marvel or Lucasfilm). Animation bloggers explain the ramifications: Amid Amadi, Jerry Beck. The "Classic Media catalog" aspect is interesting - if this makes for more visibility for the original Jay Ward, UPA and Rankin/Bass toons, great... Harveytoons, notsomuch.
posted by oneswellfoop at 3:59 PM on April 29, 2016 [1 favorite]


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