Wall Street Merger Mania Is Driving Us Toward One Single, Horrible ISP – Probably Named Comcast

from the merge-ALL-the-things dept

Many consumers are still reeling from a Charter, Bright House Networks and Time Warner Cable merger that left users with slower speeds, worse service, and higher prices. Other broadband consumers are still struggling with a bungled Frontier acquisition of Verizon assets that left users with prolonged outages and even worse customer service than the shitshow they already enjoyed. As we’ve seen for decades, this kind of mindless consolidation traditionally only benefits the companies involved, particularly in a market where real competition is in short supply.

This growth for growth’s sake is one of the major reasons Comcast — and its horrible customer service (which didn’t scale with the company’s expansion because that would have cost money) — exists. And Wall Street’s relentless thirst for growth at all costs is a major reason these companies can’t simply focus on being the best “dumb pipes” possible, instead focusing their attentions on expanding into markets they have little expertise in (see Verizon’s ingenious plan to hoover up failed 90s brands and pander to Millennials). When they can’t succeed because they’re out of their depth, they try to tilt the playing field (killing net neutrality).

There’s oodles of history lessons here, and there’s every indication we intend to learn nothing from them. With the ink barely dry on Charter’s troubled deal, and the Trump administration signaling that no merger is too big or too absurd, Wall Street analysts have been positively giddy this year pondering megamergers in telecom that had previously been unthinkable on anti-competitive or antitrust grounds. That has included heavy pushes for a Sprint acquisition of T-Mobile or a Verizon bid to buy Comcast — the massive, obvious anti-competitive impact of both deals be damned.

This week, the merger mania du jour apparently involves a plan that would involve Comcast and French-owned Altice working in concert to buy Charter Communications, whose $180 billion asking price has proven too steep for any one company to contemplate alone (Verizon made a $100 billion offer and was rejected). Citigroup has floated the idea that after acquisition, Comcast could integrate the Time Warner Cable customers they were blocked by regulators from acquiring for anti-competitive reasons, leaving us with one giant cable company to rule us all:

“Charter is pretty much an equal rival in size and scope to Comcast at this point, at least with regards to subscriber numbers. Each company has somewhere in the neighborhood of 25 million customers. For the two to merge outright would leave one dominant cable company in the country, with about half of the entire nation?s subscribers ? from coast to coast, and in many of the states in between ? under a single umbrella.”

Granted there’s no guarantee such a deal will happen. Wall Street stock jocks often like to float rumors then profit off of the herk and jerk of stock prices caused by the half-truths they themselves create. But should Comcast be able to swing such a deal, we could be looking at a supernova of anti-competitive dysfunction, the likes of which made Comcast’s well documented issues seem charming.

Consider that cable’s monopoly was already blossoming thanks to the countless telcos which have effectively stopped trying to compete — in large part because Wall Street thinks spending money to upgrade your networks is a fool’s errand. Then ponder the fact that the current FCC is busy gutting any and all meaningful oversight of these companies, allowing them to inevitably engage in all manner of anti-competitive shenanigans, from arbitrary and punitive usage caps, to net neutrality and privacy violations.

This all may sound like hyperbole, but it’s a future that’s very much under construction. And the folks giddily contemplating the “looming synergies” of such monumental coagulation are building it with absolutely zero concern for the impact on consumers, startups, small businesses or the health of the internet. Telecom sector executives and the folks paid to cheer their every decision have every intention of taking the already dismal Comcast experience, injecting it with steroids, and setting it loose on a market with no organic competitive or regulatory checks and balances. And by the time most notice the negative repercussions, these same folks will already be hyping the next wave of mindless consolidation.

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Companies: altice, bright house, charter, comcast, time warner cable

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Comments on “Wall Street Merger Mania Is Driving Us Toward One Single, Horrible ISP – Probably Named Comcast”

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Anonymous Coward says:

Re: Re:

Doesn’t matter. As soon as the company becomes large enough they just move on to buy wireless carriers and satellite companies and…

Basically: As long as there is a profit margin they believe they can expand and enough stock valuation to buy semi-competitors, the company is essentially untouchable.

Btw. One of the reasons people love patents has to do with the companies being overvalued based on the percieved power of the monopoly. A general rule on Wall Street is that the more aggressive a company is at being anti-competitive and escaping taxes, the better valuation the stock will have.

Investors on Wall Street invest based on profit margins, growing economic surpluss and a lot on percieved future economic ability.

Consolidation is a sign of the stock valuation in a sector dropping off. When they merge they will have a higher valuation and be able to merge and acquire more companies. When they are large enough, they can buy more into 5G networks and other hot future tech. Expand or expire.

Anonymous Coward says:

Re: Re: Re: Re:

“This is why I oppose basically everything to do with capitalism.”

Bingo, you win the stupid lottery.

Capitalism just means that private citizens can own a business. Getting rid of capitalism would not change any of this shit at all. But you are too stupid to understand that. There are multiple ways to make stupid people like you support things that will hurt you. No matter which road you take you will find yourself at the end of it bending over for a rich person.

Anonymous Coward says:

Re: Re: Re: Re:

A more realistic way to deal with some of the issues are actually enforcing existing laws and honouring international obligations from all sides.

Unfortunately the current reality is that the stock markets accept utter dreg companies from Marshall Islands, Bermuda and Cayman Islands where the main raison d’etre seems to be tax avoidance and to shirk legal responisbility.

A long term solution has historically been a question of turbin taxation/other discouragement of trading outside of investing (Investing includes showing up and participate in electing the board of directors, thus forcing a closer connection between stock-holders and company). Another is forcing use of non-economic metrics. But those things will happen as soon as hell freezes over.

My proposal would be for the stock exchanges to incur more responsibility for their endorsements of the investment objects and provide clearer sanctions/warnings against companies under legal investigation (like under anti-trust)/convicted companies. That would at least make the investors think twice about keeping the snowball rolling.

ShadowNinja (profile) says:

Well 1 corporation is easier to break up than several

Comcast and Wall Street would be asking for trouble from the government if they actually succeed in going through with this.

One large corporation is much easier to break up than several smaller ones.

And it’s much easier to prove the need to force new regulations on them if they’re literally the ONLY big name cable company/ISP left. Such as regulations treating them as a utility (which would greatly limit their profitability).

Anonymous Anonymous Coward (profile) says:

Re: Well 1 corporation is easier to break up than several

Interesting thought. Split them vertically rather than horizontally (or vice versa), like the did with AT&T. In other words, split them in such a way, say in thirds or quarters, with each new entity holding the same footprint, and in direct competition with each other.

Anonymous Anonymous Coward (profile) says:

Re: Re: Re: Well 1 corporation is easier to break up than several

That is my point. They took one national monopoly, and created regional monopolies, which then started to buy each other out recreating another national monopoly. If the AT&T break up was done in such a way that there were sets of regional competitors, and then did not allow them to eat each other, we would be in a better place.

Two things there, setting up a competitive environment, AND not allowing so much consolidation.

Anonymous Coward says:

Re: Well 1 corporation is easier to break up than several

With the current leadership in FCC and the current anti-trust or lack thereof, I doubt there is much consideration for such actions in the short term.

But the point is certainly valid for future administrations and particularly for more reason-persuaded politicians.

David says:


There’s oodles of history lessons here, and there’s every indication we intend to learn nothing from them.

Uh, after reaching a certain size, the amount of synergies to result in per-customer savings from company mergers is zero because you already had significantly more than one person or even office working on one type of task.

So for large mergers, any net gains resulting in Wall Street payouts occur at the cost of customers and/or workers.

How are they going to stand for it? Lack of alternatives.

You are utterly mistaken if you think Wall Street does not understand what it is doing here.

Antitrust regulations are not for protecting Wall Street. They are for protecting from Wall Street extorting consumers and workers after making sure they have nowhere else to go.

Anonymous Coward says:

Man I sure do love Cox cable too. Because they were able to sue Google and keep fiber out of the Phoenix metro area they rewarded their customers by slapping a 1TB data cap on everyone. It would have made my internet with their $10 per 50 gigs overage fee over $180 a month for 50 meg down. I just saw this week they added a new $49 unlimited data plan. Making 50 meg service with unlimited data cost $130 a month. Ridiculous. But they have a monopoly the alternative is 20 meg DSL.

tom (profile) says:

Why keep spending money contributing to elected officials to create monopoly like rules when you can just buy the competition and have the real thing?

Both AT&T and Cox were advertising Gig speed service here until Google announced we were no longer on their build out plans. Gig speed advertising disappeared almost overnight and extra added service charges started showing up. Both for Internet service and classic/substitute TV service.

MyNameHere (profile) says:

In a true free market, the end result is almost always a monopoly. One (insanely large) player can do it cheaper for longer than anyone else, and generally ends up buying out any competition. When it gets close to the end (two big players remaining) a merger is usually the best result for the shareholders.

Competition isn’t actually a natural state in a totally free marketplace. When a new competitor comes in, the market dominating player generally does enough to squash them, but not much more – or buys them out. Then thing return to normal.

We have been lucky in the ISP world because we generally have three different top delivery methods – telcos, cable companies, and wireless. But as each of these industries tries to “converge” by offering what everyone else does, you in fact set up the situation for mergers and monopoly player results. My feeling is that the US ISP market is reaching that magic point, where consolidation and mergers are the best bottom line play for each company and it’s shareholders.

Unless the basics change, the whole situation will get no better. We have had our railway mania moment, it pretty much died when Google pulled the plug on Fiber, and now we are solidly into the consolidation stage. Small ISPs get bought out by bigger ones, bigger ones merge with other bigger ones, and so on.

To change the basics, you have to change the way that people get connected. Our ISP model right now is “to the house”. Should the to the house part be a muni service? Should taxpayers be paying to wiire up every home and then inviting ISPs to fight it out beyond the last mile?

Anonymous Coward says:

Re: Re:

Should taxpayers be paying to wiire up every home and then inviting ISPs to fight it out beyond the last mile?

No, because then you’d have people saying: "I don’t want my tax dollars going to my neighbor’s porn / gaming / streaming / etc." (Basically everyone has a hatred of something that someone else likes, and many will use the "co-payment" situation to be an asshole. That’s human nature.) Or someone will want to require censorship because they are paying for it, etc.

The correct thing to do in any Capitalist society is to realize that left to it’s own devices, (1. Everyone in an economy will act responsibly. (Disinformation and ignorance prohibit that.) 2. Buy low sell high. (Greed, need I say more?) 3. If they can’t pay your price, you don’t sell, period. (Apathy.) Etc.) Capitalism will devolve to either Corporatism or Anarchy. At the very least, Capitalism will devolve to the point of being only beneficial to the few individuals wealthy / powerful enough to keep everyone else from doing so.

Therefore to avoid collapsing the system that governs your resources, there has to be meaningful limits on it’s participants. Those limits must be made so that no one participant becomes too powerful and a determent to society. Nor a risk to the economy as a whole. If these limits are violated, then society must act to restore balance to the system, and hand down punishment on the violators to ensure they will not consider their violation a valid business strategy in the future.

The US has failed to do this as a society. That’s the reason for the mega mergers, the massive layoffs / offshoring, and severe income inequality. The US has also failed to enforce any restrictions for so long that their entire legal system is now 100% beholden to these bad actors. Which makes any attempt at reversing the damage caused by these bad actors near impossible short of armed conflict. (They own the government, as such they can change the rules that would make it easier to fix the problem. Or create new impediments.)

Sadly, I’m not sure what the answer is at this point beyond attempting to increase awareness of the issue. But the root issue is much bigger than a group of companies fighting over a utility pole.

Karl Knows says:

The never ending whine

Keep beating the same dead horse, Karl.

But please, put it on the “Op-Ed” page.

None of the wired mergers lessen competition. Cable footprints were always exclusive to each other, and telcos only cross franchise boundaries for large campus MDU installs.

If Comcast-Altice gobbled up 80% of the country, so what?
All that would do is strengthen your false narrative for socialist broadband.

At the rate you’re drifting far left, I wouldn’t be surprised to see you and Susan Crawford co-penning the “modest proposal” on the front page of the Times, to nationalize Comcast.

You have Fios, because the FCC agreed to forbearance, which made the investment in FTTH attractive enough for Verizon; they took the risk, you benefited, and now that the numbers are in, it was folly, as Verizon gets all of its profits from wireless, but you still have Fiber.

Altice has stated its intentions to go all-fiber. Why?
Because they intend to profit.
If they’re going to bid for Charter, they’re doing so, again, because they think they can make money. In order to bring up broadband ARPUs to Wall Street’s $90 target, they’re going to have deliver on Gigabit+ services.

By the time they build out any extent of their footprint, wireless offerings will cut into that $90 figure, and it will have to come down.

But you would deny the unserved/undereserved/un-upgraded consumers this opportunity, because you’ve deemed it “growth for growth’s sake”?

fairuse (profile) says:

Big Always Wants More - Borg or Replicator

Is Comcast Borg or Replicator?

Study material :

According to their spokesman, in the form of an assimilated Captain Jean-Luc Picard, the Borg only want to “raise the quality of life” of the species they “assimilate.”


The Replicators were created at an unspecified time in the past on a Human world where an android called Reese was created. (..) As the population of the world grew more fearful of Reese and the Replicators, she began to teach the machines to protect her and themselves. In order to accomplish this, they began the process of self replication. (..) After Reese lost control of the Replicators, they destroyed her world and everyone living on it.

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