Founded in 1963 and headquartered in Philadelphia, Comcast Corporation is a communications, entertainment, and media company. Comcast operates in the United States where it provides its customers with phone services, video, and high-speed internet. The corporation’s business operation can be broken down to five reportable segments: Cable Networks, Cable Communications, Theme Parks, Filmed Entertainment, and Broadcast Television. Similar to Comcast Corporation, Time Warner Cable, Inc.; founded in 2003 and headquartered in New York, also provides through its broadband cable systems voice services, video and high-speed data to business services and residential customers in the United States. To local, national, and regional customers, the company also provides advertising services. In addition to these, Time Warner wholly owns the subsidiary NaviSite, Inc., through which they provide networking and transport services. The subsidiary outsources and manages cloud services and information technology solutions.In 2000, AOL (America Online Inc.) acquired Time Warner for $182 billion but this merger was one of the most unsuccessful in the American history with the company making the largest annual net loss ever reported by a company at about $99 billion in 2002. The merger was dissolved in 2003 with the company dropping the letter ‘AOL’ from its name.
If these two companies were to merge, the deal would amount to $45.2 billion(Ramachandran, Flint, & Kendall, 2015). This would mean that together they would wield more than enough power to have close to unfair competitive advantage in the broadband internet market against new market entrants and TV channel that offer video programming online. Being the two largest internet and cable providers, their merger would create a company that would be in control of 57% of the broadband service market and slightly more than 30% of the market for pay-tv(Ramachandran, Flint, & Kendall, 2015). While too much power in the market is usually not in the favor of the public, if this merger would be straightforward and not intent on reducing consumer choice it would amount to very good business. In light of the fact that cable operators do not overlap geographically, if this merger were to take place, it would result in significant increase in market share in broadband internet. This merger would help both companies to compete against many emerging threats such as technology competitors like Netflix Inc. and Apple Inc. and others in the area of conventional pay-tv model.
Despite the anticompetitive and antitrust concerns that this merger poses to the interests of the public, with concessions such as a divesture of their 30 million customers the merger would comply with the requirements of the Department of Justice and the Federal Communications Commission(Ramachandran, Flint, & Kendall, 2015).
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