The Stop Mega Cable coalition, barely out of the blocks a few weeks ago, has lost a strong ally in USTelecom, the association of US operators, which has dropped its membership of the group, established entirely to prevent further US cable mergers and particularly the Charter Time Warner Cable deal.
USTelecom said it dropped out because the coalition “no longer aligned with its policy position.” Back in November in a filing with the FCC USTelecom cited just two key issues it had with the Charter merger, it wants a promise that large cable operators will treat rivals and content companies equally and that specifically it wants to highlight the influence of John Malone and call for his personal content interests not to rise above other content firms, by doing deals on better terms with MSOs.
The truly cynical among us might suspect that one of the concerned authorities may have had a word with USTelecom, hinting that those aspects of the deal will be taken care off, giving it enough impetus to get off the anti-Charter line.
The Stop Mega Cable coalition is more about stopping the deal under any conditions and has a large contingent of content providers, and it worries about cable ownership of regional sports networks as much as their consolidation. It is also backed by Hollywood writers, who feel that their contribution to content could be marginalized. As such, none of its arguments sit well with other cable or telco operators or companies which have to sit across the negotiating table with content businesses, all year round.
Dish Networks remains a member, as does the National Association of Broadcasters, Public Knowledge, the American Cable Association and Cincinatti Bell, Time Warner and the NCTA.
But when one player deserts the table, it is often the case the internecine strike is rampant, and others may desert over the coming weeks as much through disagreement with one another as anything else. The FCC informal shot-clock is slowly expiring and it is getting closer to declaring how it feels over the merger, in the interest of the US public.
Time Warner could have perhaps pushed its own cause by not jettisoning Time Warner Cable in 2008, and turning it into a separate company. It can hardly be taken seriously now for someone else wanting an asset it did not want.
On the Stop Mega Cable website this week is a redirect to a letter from ex-FCC commissioner Michael Copps, describing this as the “the scariest cable merger nobody in Washington is talking about.”
Copps was always anti big business and on many occasions we found ourselves agreeing with him, but he has become a rent-a-quote for the anti-big-business brigade. He is right in pointing out that the tide of opinion on the Comcast TWC deal was far louder than the trickle of opposition to the Charter deal, but to suggest that the same amount of public harm comes about from this merger is to mislead the public and Big Charter looks more and more like a balancing act against Comcast’s indifference to customer care and public opinion – a very different giant.
However, USTelecom has two excellent points in that if an instrument could compel John Malone to play fair in deals between the merged operator and his own content interests, that would be reassuring.
Copps rightly points out that the new big cable companies would own programming, including regional sports networks all across the country, and would dominate some of America’s largest media markets, including New York City, Los Angeles, Dallas, Charlotte, Tampa Bay, Orlando and St. Louis.
But in the age of OTT video all that matters are those broadband lines and the ability of consumers to select their own video content over those lines, and that is pretty much in the bag for the US right now and no longer needs excessive regulation, because in Title II, it has already had it.
If Copps really thinks that the new Mega Cable would stand shoulder to shoulder with Comcast on any issues, he has no idea of the past that has gone between Malone and Comcast CEO Brian Roberts, where there is no love lost.
He is also conveniently forgetting that Title II has now been applied to the internet, and unless the courts unravel that, an area which has gone strangely quiet of late, the FCC is well placed to prevent these players squashing new OTT players.
A more worrying aspect is the amount of debt that Charter is taking on in order to complete the deal, at some $27 billion more – but a similar amount of debt was slowly eliminated when Comcast took on excessive debt to purchase AT&T Broadband, doubling in size, so we see no real problem to the public interest.
The other major cable deal in the US is the purchase of Cablevision by Altice, one which has come up against mostly local opposition concerned with job cuts. Other issues such as excessive debt, and weaker customer service have been mentioned and one financial analyst went so far as researching Numericable customer care some years ago, which led to large customer loses, and said to expect the same. But surely that’s for shareholders to worry about, not the public.