If you're one of the millions of Americans fed up with the state of the cable industry, one story this week turned your stomach like a jar of sun-bleached mayonnaise.
(NASDAQ:CMCSA), the largest cable company in the country, announced it would buy out Time Warner Cable
(NYSE:TWC), the second-largest cable company in the country, for $45.2 billion in an all-stock deal. Time Warner's 11 million customers -- located in markets such as New York City, Southern California, and Texas -- will soon be a part of Comcast's fold, raising the latter's subscriber number to around 30 million.
Although the merger is scheduled to be completed by the end of 2014, it will have to face a number of regulatory hurdles and a wealth of antitrust concerns. But Comcast has a plan to keep its market share under 30% -- a magic number by FCC regulations -- by divesting 3 million subscribers. (Also in its favor is an FCC chief who worked as a lobbyist
for the cable industry.)
Not surprisingly, Comcast's executive vice president David L. Cohen remains confident such a merger will be a winning combination for both companies, their customers, business, America, and humanity in general.
"This is a friendly transaction, forged in a dynamic and robustly competitive landscape," Cohen wrote in a public statement, referring to an industry where many customers only have one choice in cable providers. "The transaction is strongly pro-competitive and is firmly in the public interest," he added, seemingly referring to some other merger.
As cable customers face the possibility of even fewer mega-corporations controlling our airwaves -- and Google
(NASDAQ:GOOG) Fiber available in painfully few markets -- we need companies like Aereo more than ever.
provides localized over-the-air television to Web-connected devices with the ability to record and view time-shifted streams of live content. Folks in, say, the New York City market are able to stream channels that are accessible in the NYC area via TV antenna -- a perfect solution for those in an apartment or in an area with poor antenna reception. Supported devices include iOS
(NASDAQ:AAPL) and Android phones and tablets, as well as Windows
(NASDAQ:MSFT), Mac, and Linux PCs, Roku boxes, and Apple TVs. (Chromecast support is reportedly underway.)
The service is very inexpensive: a mere $8 per month for access and 20 hours of online DVR space, and $12 per month for 60 hours and the ability to watch on two devices at once. Unfortunately, customers have to live in a handful of locations across the country to receive access to the streams.
Naturally, Aereo has cable providers up in arms. The company has been hauled into court by broadcasters and accused of copyright infringement material, but Aereo has emerged victorious in every instance and been allowed to continue operations. However, the cable companies then filed a petition for the Supreme Court to hear their case, which it has agreed to do in April.
So, just to recap: This year, the public could see the top two cable companies join forces, the end of an inexpensive method to watch over-the-air television in legal markets where they might not be able to get reception to watch content they're entitled to, and an online market where the public's sole means of Internet access is selectively capped and throttled because of a simple case of semantics. (See: Google to Hold ISPs' Feet to the Fire
and America's Internet Speeds Are Embarrassingly Slow
While it's easy to feel like consumers have already lost in the fight against cable companies' greed, without content alternatives like Aereo, we stand to lose so much more.
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No positions in stocks mentioned.