Franken Urges Netflix To Join Fight Against Comcast, Time Warner Cable Merger
WASHINGTON (WNEW) — One of the most vocal lawmakers opposing the planned merger between media giants Time Warner Cable and Comcast, Sen. Al Franken, D-Minn., is now looking to Netflix for help bringing down the Comcast proposal.
In a letter sent to Netflix CEO Reed Hastings on Wednesday, Franken urges the Internet competitor to “gauge the risks” posed by the deal that he argues would raise costs and limit choices for consumers.
“As a popular provider of Internet content that competes directly with Comcast, Netflix is uniquely positioned to gauge the risks posed by this deal,” Franken writes to Hastings, inviting Netflix to challenge the April 9 testimony given by Comcast during a Senate Judiciary Committee hearing on their proposed purchase of Time Warner.
“Comcast will be able to use its clout in the broadband distribution market to obtain an anticompetitive advantage in the content market,” writes Franken. “Comcast can achieve this by blocking, degrading, raising costs for, or otherwise interfering with unaffiliated content that relies on Comcast’s distribution network to reach consumers.”
One of the lone lawmakers opposing the acquisition, Franken told CNN on Sunday that the merger would be a “disaster.”
“This is the No. 1 cable TV company buying the No. 2. And this is the No. 1 Internet broadband company buying the No. 3,” Franken said to CNN.
In the Minnesota Democrat’s appeal to Netflix, he notes the company’s recent complaints against having to pay regular fees to Comcast intended to maintain high-quality video streaming. Netflix reported that average streaming speeds surged by 65 percent on Comcast’s network after they reluctantly agreed to chip in costs to help Comcast handle increasingly heavy traffic, BGR reports.
Franken is urging Netflix to weigh in on whether the Comcast/Time Warner Cable merger would hurt competition within home broadband services, and if the acquisition would allow the companies to leverage other companies for peering agreement fees.
In his letter to Hastings, Franken reiterates the massive media influence that would be made available to the merged companies, and the associated anticompetitive risks.
“If Comcast is permitted to acquire Time Warner Cable, its size will increase dramatically, as it will obtain a presence in 19 of the top 20 markets and will control broadband access for nearly two out of every five American households,” writes Franken. “When Comcast acquired NBC Universal, the FCC noted the unprecedented nature of Comcast’s vertical integration and concluded that it would ‘increase Comcast’s incentive to discriminate against unaffiliated content and distributors in its exercise of control over consumers’ broadband connections.’”
Comcast and Time Warner Cable say that Franken’s fears of increased costs for Internet companies and Internet users are unwarranted, and the merger would allow more competition with global audiences.
“We realize, looking three years ahead, five years ahead, 10 years ahead, in order for us to continue to be competitive we need to have the additional scale that comes from this transaction,” Comcast Executive Vice President David Cohen told senators last week, suggesting that competition would be encouraged against online content providers such as Netflix.
Established in 1997 and headquartered in Los Gatos, Calif., Netflix has amassed 36.3 million subscribers to its digital content as of April 2013, Wired reports. Increasing its own original content, Netflix secured the first Academy Award nomination for “The Square.”
Franken’s plea for Netflix input on behalf of consumer and competitive advantages would likely provide some leverage against two companies ranked among the American Consumer Satisfaction Index’s “most disliked companies in America.”