As the U.S. Department of Justice and the SEC were reviewing
the proposed merger between Comcast and Time Warner in April 2015, six U.S.
senators signed a joint letter opposing the $45 billion deal. Comcast would
control about 30 percent of the pay-television subscribers in the U.S. and an
estimated 35 to 50 percent of the American broadband internet service.[1]
That more senators had not signed on is telling with respect to how business-oriented
American society had become.
At the time, the Justice Department was investigating
whether the takeover would harm competition, while the Federal Communications
Commission was evaluating whether the combined company would be in the public
interest. For their part, the senators wrote that the combined company’s
“unmatched power” would reduce competition and hamper innovation, as well as
lead to higher prices, fewer choices, and worse service.[2]
Opponents more generally “portrayed Comcast’s effort as a land grab that would
give the company too much leverage in the industry.”[3]
In short, one company would have too much power over the future of television
and broadband. What about over Congress? The silence alone on this question is
telling.
Beyond the industry-level impacts, which would admittedly be
quite significant, the plutocric ramifications are also striking. That is, the
giant company would have so much financial muscle that its forays into campaign
finance would likely have an anti-democratic impact. Members of Congress, for
example, would be subject to greater temptations to do Comcast’s bidding at the
expense of their respective constituents (and states). As recipients of
political-campaign donations, elected representatives have an incentive to look
the other way as a large corporation gets even bigger.
In 2008, for example, the largest single contributor to
Barak Obama’s presidential campaign was Goldman Sachs. The $1 million
contribution helped insure that the White House under Obama would not come down
too hard on the bank (or Wall Street). Interestingly, the Dodd-Frank Financial
Reform Act of 2010 does not give the federal government the authority to break
up banks that are too big to fail. Similarly, a “super Comcast” would insulate
itself in Congress against populist attempts to break up the company in order
to bring more competition to the television and internet industries. I submit
that anti-trust law ought to be strengthened to include the protection of
representative democracy from encroachments from large concentrations of
privately-held capital (i.e., large corporations).
[1]
Emily Steel, “6 Senators Urge Rejection of Comcast-Time Warner Cable Deal,” The New York Times, April 21, 2015.
[2]
Ibid.
[3] Emily
Steel et al., “Comcast Is Said to Abandon Bid for Major Rival,” The New York Times, April 24, 2015.
