(The New Yorker) – Credit where it is due: the federal government’s decision to block the merger between Comcast and Time Warner was the right one. In the past, I have criticized the Justice Department and the Federal Communications Commission for failing to enforce competition laws vigorously enough. On this occasion, according to media reports, the staffs of the D.O.J. and the F.C.C. both concluded that a Comcast–Time Warner combine wasn’t in the public interest, and their bosses backed them up. That’s how things are supposed to work, and, coming on top of the F.C.C.’s decision to classify broadband Internet service as a public utility, it demonstrates that the regulatory environment in Washington has changed.
For years, it seemed that the cable industry, and Comcast in particular, had captured much of the U.S. regulatory apparatus. After the Comcast–Time Warner merger was announced in February, 2014, I posed a simple question: “Does Comcast Own Washington?“ It turns out that it doesn’t, and that’s very welcome. But it’s only a start.
The demise of this merger is unqualified good news for content producers, such as television studios, and for alternative content-distribution systems, such as Netflix and Amazon, which feared being bullied by a Comcast–Time Warner combination that would have dominated nineteen of the top twenty television markets in the country, and would have controlled up to forty per cent of the nationwide broadband market. Although Comcast gave assurances that it wouldn’t seek to exploit its enhanced monopsony power, the staffs of the regulatory agencies appear to have decided, quite rightly, that these promises were unlikely to have been honored.