The nation’s No. 1 cable operator joined the nation’s third largest cable operator. Last week the Federal Communications Commission approved license transfers for AT&T and Comcast to merge and become AT&T Comcast Corp.
The vote was 3-to-1. Michael J. Copps, was the dissenting vote. He believes the company could very easily abuse its power.
The new conglomerate will serve 27 million homes and 17 of the nation’s 20 largest cities. It also will be able to produce quicker broadband Internet connections and advanced cable television services.
It will also control 30 percent of the cable television market.
The company won’t give much of a chance for other cable services to survive. Once the two companies combine, it would become easier for the new company to gain even more control over the market. No small mom-and-pop businesses can fight a gargantuan company like the proposed AT&T Comcast Corp and the many perks it can offer customers. They simply don’t have the financial resources.
Although the FCC says there is no evidence the merger would lead to higher costs, the economics is very simple. If Comcast gains more control of the market, customers could be charged higher prices. At the beginning, Comcast could face a little competition. However, if it beats out all the local cable services, there would be no more competition. Therefore, the prices would start soaring.
The United States does not need anymore monopolies. Consumers are already facing high prices. They would not like to see the trend to continue.
The nation’s economy relies more on competition than consolidation. Competition usually leads to better prices. Local companies would be offering cheap prices because they would be competing. The local companies know nothing can keep a person from not buying their service unless others’ prices are lower and their benefits are better.
But we have seen this situation before. Is there a major difference between Bill Gate’s Microsoft and AT&T Comcast Corp? Gates was forced to split his company into two parts: an operating company and a software company. America’s legal system thought Microsoft had too much power. Why should Comcast receive any special treatment?
There is a belief that the new company would be a valuable asset to the cable market. Not only will television watching be more enjoyable with the greater array of television services, but the Internet will be much quicker. People won’t have to wait 10 minutes in front of their computers to go from one Web site to another. Working and researching on the Internet would become much more efficient.
However, the new merger is a mistake with faults that lie beyond the immediate benefits. By allowing this to happen, the country would show its hypocrisy in monopoly rulings and pave the way for non-competition markets.
