Has Comcast won the cable wars? asked Paul Krugman in The New York Times. The broadband giant, by far the biggest in the U.S., announced last week that it would acquire Time Warner Cable—the second-biggest—for $45.2 billion. If approved, the deal would give Comcast half of all U.S. cable users, making it “an overwhelmingly dominant player in the business.” Such a competition-stifling acquisition “would have been unthinkable” years ago, when regulators and policymakers took antitrust seriously. But since the Reagan years, critics have argued that in our “era of global competition,” new technology alone is enough to disrupt “old industry giants.” The dogma is that antitrust is essentially anti-market and that regulation isn’t necessary. Don’t believe it. “Creative destruction has been oversold,” especially for services—like cable—that aren’t subject to international competition. For them, “monopoly itself is a barrier to innovation.” After all, when cable customers “have nowhere to go,” what incentive do providers have to get better?
Still, there’s a compelling logic to “this unholy union,” said Brian Barrett in Gizmodo.com. It’s getting hard out there for cable providers. “Companies like Comcast and Time Warner Cable are losing customers by the hundreds of thousands every quarter,” as “cord-cutters” switch to cable alternatives like Hulu Plus, Netflix, and Aereo. Together, Comcast and TWC “will be able to capture whatever cable TV market is left, even as it dwindles.” More ominously, though, these companies also “control the pipes to get the Internet to your house.” The concern is that without a big competitor, the joint company will find it “easy to do nothing” to improve service.
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