Two and a half months before Comcast and Time Warner announced plans to merge into the nation’s largest cable operator, one of Comcast’s founders surprised a room full of Philadelphia business executives with his candor:
“Some parts of it were a natural monopoly,” said Julian Brodsky of Comcast’s history. “I can say that now. I never would have said it then.” The audience laughed.
Brodsky added that with as many as five video providers in some markets today, there is no longer such a thing as a monopoly in the cable market. Both companies have used the same argument in press interviews since their announcement of the merger.
But critics argue that the deal will allow Comcast a “virtual monopoly” in 19 of the 20 largest markets if the merger were allowed to go through. As economist Paul Krugman put it, “Comcast perfectly fits the old notion of monopolists as robber barons, so-called by analogy with medieval warlords who perched in their castles overlooking the Rhine, extracting tolls from all who passed.”
Industry observers are still trying to measure the potential impact of such a combination.
“Both TWC (Time Warner Cable) and Comcast have grown by merger—that is normal for the industry,” Steve Ross, Corporate Editor of Broadband Communities Magazine told WhoWhatWhy. “But the two largest operators in an industry of this size merging is obviously rare, and that alone demands careful review.”
Although Brodsky offered no hint of the coming merger plans in his November 2013 speech to the Founder Factory Symposium, his speech, which received surprisingly little news coverage, offered insight into Comcast’s emergence as the dominant cable company.
Read more at WhoWhatWhy.com
