Dish Network expressed concern this week over two important upcoming merger deals set to further alter the already-transforming pay-TV landscape – those of Comcast/Time Warner Cable and AT&T/DirecTV. Jeffrey Blum, Dish’s senior vice president and deputy general counsel, submitted a formal filing with the FCC yesterday claiming that the deal between Comcast and TWC “presents serious competitive concerns for the broadband and video marketplaces.” Dish did not ask for intervention on behalf of the FCC – the company merely expressed its perspective.
A primary concern outlined in the filing is that Dish sees the deal – touted by Comcast and TWC as something that would improve the current situation for customers – as not really being all that effective. Blum notes in the letter that “there do not appear to be any conditions that would remedy the harms that would result from the merger.” In particular, the satellite service provider points out that if and when the merger is all said and done, the resulting combined company “would have an increased incentive and ability to leverage its control over the broadband pipe to undermine” what Dish refers to as “the lifeblood of over-the-top video services.” (AKA competitors of the future Comcast/TWC entity)
This “lifeblood” of services like Netflix and Hulu is made up of high-capacity cable broadband connections.
Dish argues that the Comcast/TWC beast will have at least three “choke points” in the broadband pipe where it can essentially harm competing video services. These three main ‘choke points’ are, according to Dish: the “last mile” of the public Internet channel leading up to the consumer, the interconnection point itself, 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. Each of these chokepoints provides an opportunity for the combined company to foreclose the online video offerings of its competitors. Blum goes on in the filing to posit Dish’s viewpoint that the sheer size of the combined company will allow it to leverage programming content in so-called “anti-competitive” ways.
Furthermore, the filing also addresses the AT&T/DirecTV merger, namely the fact that – should that deal go through, too – the combined company would also have the incentive and ability to restrict the ability of programmers to grant digital rights to competing pay-TV and OTT video providers.
According to a report from Ars Technica, Comcast has responded to Dish’s allegations by painting itself and TWC as the underdog: “As our filings have shown, every market we operate in is highly competitive. Dish has long been one of our most vigorous competitors, and unlike us has a national footprint available in tens of millions of more homes than a combined Comcast-Time Warner Cable. Dish not wanting stronger competitors isn’t surprising and it isn’t new.” While Dish might just be crying foul in the face of increased competition on the horizon, Comcast’s attempt at casting itself as Robin Hood just doesn’t make a whole lot of sense.