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Cable Technology Feature Article

January 27, 2011

Comcast-NBC Merger: An Increase in Cable Prices?

By Michelle Amodio, TMCnet Contributor

There’s been much hubbub all over the newswires with the recent merger of Comcast (News - Alert) and NBC, and most of the ruckus seems to be split on whether this is a good or bad thing.

The cable company has long been hit with criticisms for its practices, specifically in terms of how it controls what gets passed through its network. Recently Comcast demanded a recurring fee from Level 3, a Content Delivery Network (CDN) to transmit Internet online movies and other content to Comcast’s customers who request such content. The news has both companies biting each other’s heels, as Comcast claims that Level 3 is no better than its other CDNs, while Level 3 feels it’s been strong-armed by the cable company.

All that aside, the merger has many of us wondering what it is going to do to cable prices for the customers. The recent approval is putting prices on a fast track to increase, at least it seems that way.

"Cable prices have been spiraling out of control, well outpacing increases in other household goods. We are talking about 100 percent plus growth in the cost of cable in past decade and it is has only just begun. It really is a David v. Goliath situation," said Alexander Per, economist at CBSaver.

With a merger of this caliber, it leaves a lot of people thinking “conglomerate” or “monopoly.” The truth of the matter is, the concern is ultimately controlling costs, but a simple Google (News - Alert) search will yield a lot of blogs and thoughts on the matter that seem to feel this spells doom for how information will be passed over the airways and that costs will be ludicrous. The FCC (News - Alert), however, ensures that Comcast does not withhold networks from any of its providers. Because of this, Comcast must also offer its video content to other providers at a reasonable cost, so that could dictate prices remaining stable for the consumer.

There are many reports going head-to-head on the issue, and no one seems to agree on the matter whatsoever.

"It is clear that the Comcast-NBCU deal will send monthly cable bills higher by billions of dollars over the next decade, underscoring ACA's view that regulators must protect consumers and competition from a transaction whose benefits are vastly outweighed by its harms," American Cable Association President and CEO Matt Polka said, as reported by the Benton Foundation.

Only time will produce results on the issue. Right now, the merger has stirred a lot of both concerns and praise amongst local television broadcasters, politicians and customers.

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Michelle Amodio is a TMCnet Contributor. She has years of experience in business and marketing. Previously, she worked in broadcast journalism and as an editor abroad in London, England for a privately owned magazine. To read more of her articles, please visit her columnist page.

Edited by Tammy Wolf