We are without a doubt in an age of mega-merger consolidation in telecom; the tie-up between AT&T-DirecTV was recently approved, while Charter-Time Warner (News - Alert) Cable-Bright House Networks is in the process and looks likely to go through. And these deals won’t be the last.
The most immediate effect of this M&A activity will be to consolidate control over the high-speed Internet infrastructure in the U.S. into the hands of fewer ISPs. Competition for that indispensable tool for both businesses and consumers is at the heart of the FCC’s and Department of Justice’s reviews of deals like this; and in fact the Comcast (News - Alert)-Time Warner Cable proposed merger fell apart after the Commission expressed concern that it would give Comcast too much control over broadband.
So, how will the most recent mergers impact the broadband access picture from a public policy perspective?
“The answer to that question remains to be seen,” said Betsy Hammer, legislative analyst in the government finance and operations policy area for the California State Association of Counties, in a blog. “In documents filed with the California Public Utilities Commission, the companies requesting approval to merge list many potential benefits to consumers and the state. However, opponents of the merger cite many potential concerns with it, including a lack of competition, lack of investment in further developing broadband infrastructure, and price considerations.”
Different counties will be impacted in different ways, she added: some of California’s 58 counties are in territory served by none of the companies involved in the proposed merger, while other counties are in the service territory of one or more. Some counties currently enjoy robust broadband service with 100 percent of households able to connect, while other counties have significant portions of their residents unable to access broadband.
“The companies have filed the application, and we’ve just passed the deadline for initial protests and requests for party status,” Hammer added. “There are many more steps before anything is finalized, but as we navigate this process it’s important to remember why it matters. While the technology will continue to develop, access to it will only get more important in our lives.”
Edited by Rory J. Thompson