Editorial: Comcast-AT&T merits scrutiny

Jul 23, 2001  •  Post A Comment

The television industry isn’t exactly cheering Comcast Corp.’s courtship of AT&T Broadband. A marriage of the two giant cable providers would produce a cable firm large enough to dwarf any current provider-and large enough, some fear, to exert undue influence over programmers.
AT&T last week rejected Comcast’s initial bid to acquire Broadband, the nation’s largest multiple system operator. But that step, still part of the early mating dance between the two corporations, was hardly a surprise considering Comcast, the No. 3 cable provider, had already indicated it would be willing to sweeten the pot should AT&T spurn its advances.
Indeed, Comcast remains undeterred in its lust for Broadband, and the consensus is that the union will eventually be consummated.
That would be unfortunate. With media consolidation careening out of control, it may be futile to continue to bemoan the negative impacts of unleashing ever-larger mega-corporations on the world. But futile or not, it is still worth pointing out that larger corporations tend not to serve the interests of anyone but the corporations themselves. In the case of a combined AT&T-Comcast cable goliath, a lot of other media firms-not to mention consumers-have some legitimate fears.
Comcast freely admits a lot of its affection for Broadband is attributable to the prospect of saving as much as $500 million annually in programming costs, thanks to economies of scale and AT&T’s sweetheart carriage deals. Those hefty “savings,” viewed from the flip side, add up to lost revenues for programmers.
Bear in mind that Comcast is itself a programmer, counting among its family of cable networks E! Entertainment, QVC, The Golf Channel and others. With the leverage provided by 22 million subscribers, a bigger, bolder Comcast can be expected to play hardball in carriage negotiations with its competition-and it’s easy to see how some smaller cable networks could be put at risk.
One network that must feel as though its neck is already on the chopping block is Oxygen. The fledgling cable net has struggled to gain carriage, and though it has a deal with AT&T, it has been unable to come to terms with Comcast. Oxygen, it’s safe to assume, is no fan of the proposed acquisition.
But as we have seen time and again, corporations will be corporations, and like teen-agers who sneak out the window at night, there appears to be nothing anyone can do to keep them from getting together.
We can only hope that the parties involved will behave rationally, that those who are likely to be impacted by the deal will be allowed to make their voices heard and that the regulators charged with overseeing the media industry will take a serious look at the possible fallout from the acquisition.