Comcast and Time Warner Split. Why Care?

The big news last week in the tech world was the demise of the proposed merger of Comcast and Time Warner Cable. These two media behemoths were planning to get hitched and the resulting union would have formed a company that would serve about one half of all cable and internet subscribers in the US.

When this marriage was announced last year, pundits and regulators alike weighed in on the awesome benefits or dire consumer peril (pick one) that would ensue. Ultimately the dangers of allowing one company to control such a large and important part of our economy doomed the deal. Rather than fight government regulators, the two companies decided to walk away.

The issues surrounding the planned merger will remain long after this ill-fated Wall Street union is forgotten. Coming to grips with these issues will be imperative if we are to improve infrastructures to support our digital economy.

Media companies, like Comcast and Time Warner are trying to figure out you, the consumer. Once quite predictable, the way you consume media and pay for media is changing faster than most any company has been able to adapt. While the majority of TV viewers still subscribe to traditional cable, that number continues to decrease. Companies like Comcast and Time Warner have been struggling to decide if they want to be in the programming business or the delivery business. The merger, if allowed, would have enabled them to be in both.

When the merger was first announced it came at an inopportune time. The FCC and media companies were debating net neutrality. The decision by the FCC was to treat internet service providers (ISPs) like phone companies, requiring them to provide equal access (and speed) to all using their networks.  So owning the programming and the network was less important.

It has been reported that already other smaller media companies have approached Time Warner as a partner and possible merger candidate. At a time when there is so much uncertainty in consumer habits and technology advancement, size does matter. Large vertically integrated media companies can afford to take chances and experiment.

In the meantime, sit back and get ready for even more changes in the media landscape.  Whether these changes will benefit the consumer remains to be seen.