Direct broadcast satellite service provider Dish Network has issued a letter to the U.S. Federal Communications Commission (FCC), which points at the harmful results of the Comcast and Time Warner Cable (TWC) merger.
Dish Network sent the letter to the FCC on Wednesday, July 9, which flags several concerns regarding the multi-billion deal between Comcast and TWC that was announced in February this year. Dish Network wants the FCC to block the deal as it will reshape the entire broadband and video industry in the U.S.
Jeffrey Blum, senior vice president and deputy general counsel at Dish, wrote in a letter addressed to Marlene H. Dortch, the commission's secretary, that the agency decision regarding the big mergers will impact the competitiveness of Dish Network and similar non-dominant companies in the broadband and video industry. Dish Network estimates that the company will face harmful results if the mergers are accepted by the FCC.
The Comcast ad TWC deal will merge the country's two largest cable companies and the new entity is estimated to have a massive user base in the country. If the FCC approves the deal then Comcast will control about 35.5 percent of the fixed broadband market in the U.S. The newly formed entity will have around 27.9 million residential broadband customers and 29.1 million video subscribers.
"Comcast/TWC will have at least three 'choke points' in the broadband pipe where it can harm competing video services: the last mile 'public Internet' channel to the consumer; the interconnection point; and any managed or specialized service channels, which can act as high speed lanes and squeeze the capacity of the public Internet portion of the pipe," reads the letter issued by Blum.
Dish suggests that if the merger goes ahead then Comcast may use its increased control over broadband to harm companies that offers video services.
Dish Network also says that the newly formed entity may use its market power to force programmers to charge a smaller fee for their content, which means that smaller pay-television providers may have to pay more when compared to Comcast/TWC.
The filed documents also revealed that Dish Network is also concerned over the recent merger proposal of AT&T and DirecTV, but did not ask agency to block the deal.
"DISH also explained that the recently announced AT&T/DIRECTV transaction presents competitive concerns. Among other things, AT&T and DIRECTV will also be able to combine their market power to leverage programming content, to the potential detriment of consumers," added the letter.
The FCC will be under immense pressure and will have to be extremely cautious while analyzing all aspects of the Comcast-TWC and AT&T-DirecTV mergers. The companies involved in the merger will hope to see a green signal from FCC but competitors will hope that the FCC refuses the merger proposals.
