HBO And CNN Are Concerned About The Time Warner Cable-Charter Merger
Media giant Time Warner Inc (NYSE: TWX), which owns HBO and CNN, is concerned with the proposed merger of Charter Communications, Inc. (NASDAQ: CHTR), Time Warner Cable Inc (NYSE: TWC), and Bright House that would create the second-largest cable company behind Comcast Corporation (NASDAQ: CMCSA), according to Consumerist.
Time Warner is concerned that a larger, stronger Charter might work to hold back progress in streaming video, the main competition for its cable service. Time Warner filed its concerns with the Federal Communications Commission.
Why Time Warner Is Concerned
The concern for Time Warner, which spun off Time Warner Cable last decade, is that a larger, post-merger cable company would control customers' broadband connections, and might find ways to keep future developments in streaming content away from their customers.
In a filing with the FCC, Time Warner points out that "if the merger is approved, a combined Charter-Time Warner Cable-Bright House will attempt to harm the continued development of over-the-top video broadband competition."
Charter Defends Deal
Charter declined the allegations and said if content is available for customers to purchase directly, content providers (like Time Warner) will be forced to lower the prices that they charge cable companies and unable to sell content exclusively in bundles.
"If content is widely available, the price customers and service providers are willing to pay is lower. It is simply Economics 101. Asking Charter to continue to pay the same rates despite increased availability of the content is akin to asking us to punish our customers for using our service," Charter wrote in a blog post.
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