TimeWarner1's Blog

Comcast and Time Warner: What Would it Mean?

Categories: Blog February 7, 2015 @ 1:49 AM 0 Comments      



In the world of pay television, news isn't getting much bigger than the headlines that splashed over newspapers an internet-based media organizations in the center of February announcing Comcast's $45 most important takeover bid of Time Warner Cable, Inc. - Charter

The merger, if it's allowed to go through, would dramatically alter the cable TV business landscape by essentially making Comcast, a mega company since it currently exists, the most important cable television provider in the nation.

While it's easy to receive the fainting vapors, again, about another potential cable merger squelching competition and limiting consumer cable television viewing and payment options, there's a far more ominous specter lurking within the obvious but somewhat ignored information on the deal.

Simply stated, cable tv business models lack much left in the form of shelf life. Cable television like a business is probably financially viable for the next 10 or 15 years, nevertheless the real future of television lies with broadband Internet.

As broadband Internet television continues to spawn streaming video options like Hulu, Netflix yet others, in conjunction with the expanding realm of handheld WiFi-enabled devices, you can imagine a straight cable tv completely disappearing since it melds into the exploding world of broadband.

And therein lies the ominous specter lurking inside the potential Comcast and Time Warner merger. A good, standard quality streaming video typically requires a broadband connection of greater than 2Mb/s, while a high definition stream can require 4Mb/s or more. Once you start factoring in excellent audio, plus any concurrent downloads or uploads, you can observe a considerable jump in your broadband requirements.

For Time Warner Cable, such considerable broadband requirements haven't been much of an issue. As being a Time Warner Cable subscriber, you can pretty much binge on all the broadband each month when you wanted. In fact, most Time Warner Cable customers probably weren't even aware there was such a thing as putting a strain on broadband.

On the Comcast side of the coin, however, broadband can be a relatively tightly held commodity where customers are regularly capped at the amount broadband they can devour during a month. Granted, Comcast's broadband caps are fairly generous as they apply to casual or perhaps moderate broadband users, nevertheless the broadband gluttons (gamers) can and do hit their broadband ceilings. Generally, Comcast doesn't radically enforce its caps, however that can always change.

So, time for the Comcast and Time Warner merger. Should the merger get the nod of approval from the government, you'll have the bigger company, Comcast, with its broadband caps, buying out Time Warner, using its casual approach to broadband. Therefore, everything you potentially have on the horizon is often a multitude of Time Warner customers that are used to unlimited broadband suddenly being informed that broadband caps now exist. Further, you'll have a company that just paid out $45 billion in acquisition costs seeking to fill its coffers.

The question just begging a response is this - will the merged Comcast and Time Warner venture plan to start clamping down on customers who regularly exceed their monthly broadband allocations? Maybe there is financial penalties incurred?

The solution is... probably.

Again, we must go back to the emerging realities of streaming video. As the streaming video technologies keeps growing, evolve and improve, and as more streaming video providers go into the marketplace, the need for more broadband to allow for ever growing video streams means current broadband caps will likely be surpassed more regularly. The financial impetus to penalize probably the most egregious broadband cap violators will, without doubt become too tantalizing to feed up.

Of course, additionally it is entirely possible that advances in broadband technology could push broadband ability to heights previously considered unattainable. Broadband capacity could outstrip demand, keeping prices stable and pushing broadband caps really at high point only a select few could always surpass caps. As with every technologies, only time will tell, and in all probability not all that much time during this. - Charter

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