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Comcast and Time Warner: What Could It Mean?

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In the world of pay television, news does not get much bigger than the headlines that splashed over newspapers and internet based media organizations during February announcing Comcast's $45 high dollar takeover bid of Time Warner Cable, Inc. - Charter

The merger, should it be allowed to go through, would dramatically alter the cable TV business landscape by essentially making Comcast, a mega company since it currently exists, the largest cable television provider in america.

While it's easy to have the fainting vapors, again, about another potential cable television merger squelching competition and limiting consumer satellite tv viewing and payment options, there's a far more ominous specter lurking in the obvious but somewhat ignored information on the deal.

Simply stated, cable tv business models do not have much left when it comes to shelf life. Cable television being a business is probably financially viable for an additional 10 or 15 years, nevertheless the real future of television lies with high speed.

As broadband Internet television will continue to spawn streaming video options like Hulu, Netflix and others, in conjunction with the expanding arena of handheld WiFi-enabled devices, you can imagine a straight cable tv completely disappearing since it melds into the exploding world of broadband.

And therein lies the ominous specter lurking inside the potential Comcast and Time Warner merger. An excellent, standard quality streaming video typically needs a broadband connection of greater than 2Mb/s, while a high definition stream can require 4Mb/s or maybe more. Once you start factoring in high quality audio, plus any concurrent downloads or uploads, you will see a considerable jump in your broadband requirements.

For Time Warner Cable, such considerable broadband requirements haven't been much of an issue. As being a Time Warner Cable subscriber, you may pretty much binge on as much broadband each month while you wanted. In fact, most Time Warner Cable customers probably weren't even aware there is such a thing as putting a strain on broadband.

Around the Comcast side of the coin, however, broadband is a relatively tightly held commodity where company is regularly capped at the amount broadband they can devour during a month. Granted, Comcast's broadband caps are fairly generous because they apply to casual or even moderate broadband users, though the broadband gluttons (gamers) can and do hit their broadband ceilings. Generally, Comcast doesn't radically enforce its caps, but that can always change.

So, to the Comcast and Time Warner merger. When the merger get the nod of approval through the government, you'll have the greater company, Comcast, with its broadband caps, buying out Time Warner, with its casual approach to broadband. Therefore, that which you potentially have on the horizon is really a multitude of Time Warner customers who're used to unlimited broadband suddenly being informed that broadband caps now exist. Further, you'll have a company that just paid out $45 billion in acquisition costs planning to fill its coffers.

The question just begging a solution is this - will the merged Comcast and Time Warner venture opt to start clamping down on customers who regularly exceed their monthly broadband allocations? Could there be financial penalties incurred?

The answer then is... probably.

Again, we have to go back to the emerging realities of streaming video. Because streaming video technologies continues to grow, evolve and improve, so that as more streaming video providers go into the marketplace, the need for more broadband to support ever growing video streams means current broadband caps will be surpassed more regularly. The financial impetus to penalize the most egregious broadband cap violators will, without doubt become too tantalizing to pass up.

Of course, it's also entirely possible that advances in broadband technology could push broadband chance to heights previously considered unattainable. Broadband capacity could outstrip demand, keeping prices stable and pushing broadband caps really at high point only a select few could always surpass caps. As with every technologies, only time will tell, and probably not all that much time as well. - Charter



Posted Feb 06, 2015 at 11:49pm