Comcast-Time Warner Merger Reviewed in New York; Is This Good for Latinos?
New York City comptroller Scott Stringer told the New York State Public Service Commission (PSC) Monday that in order for a Comcast-Time Warner merger to go through, the state requires a promise of better Internet service. The fear? That a merger between the No. 1 and No. 2 cable providers will take the incentive away from providing access to significant portions of the population, including Latinos.
Comcast and Time Warner Cable are in the midst of a regulatory review process that has a huge set of eyes on the $45 billion deal. Although the issue is national, New York Governor Andrew Cuomo said in May that he would give the merger a "hands-on review" and the PSC does have the authority to block the merger from taking place within the state. According to the Washington Post, around 10 percent of a combined Comcast-Time Warner company's cable subscribers would come from New York. Comptroller Stringer does not have a seat on the PSC so his testimonies are considered recommendations and nothing more.
"It is critical that the PSC not only press Comcast to significantly expand the reach of Internet Essentials, but also that it engage in appropriate oversight to ensure that the company is meeting its commitments to low-income residents of the Empire State," Stringer wrote in a five-page draft he submitted to Capital.
Internet Essentials refers to a Comcast program aimed at providing better broadband at lower prices for low-income families.
According to 2013 U.S. census data, the state of New York has a population of a little over 19 million. Of those 19 million, 18.4 percent consider themselves "Hispanic" or "Latino." Among the 71 percent in New York who consider themselves "White alone," 13 percent identify themselves with some aspect of a Hispanic or Latino background. Quick arithmetic shows that this makes people with a Hispanic or Latino connection the second-most important demographic in New York state.
"The PSC will critically review the protections being offered to low-income customers as well as how the proposed merger might impact consumer pricing and telecommunication competition overall," Gov. Cuomo said.
Basic, fundamental economics is at play here. Consolidation inarguably removes at least one other competitor from the playing fields. Less competitors is often associated with less competition. Less competition usually leads to higher prices for consumers. These are the concerns of the U.S. government, which will be looking at the merger long and hard since it will result in a sole company that provides cable access to 70 percent of Americans, according to Harvard Law School Visiting Professor Susan Crawford during a Bloomberg interview.
Latinos have the second-lowest access and/or adoption of broadband in the United States, according to White House data, out of a group including Asians (highest), Whites, and African Americans (last). With a 55 percent adoption rate, consolidation concerns become serious when the second-largest demographic of a state might have a harder time procuring Internet access. Although Internet Essentials was geared towards situations like this, it looks like Comcast's plan isn't as successful as it previously expected.
As mergers and consolidation continue to hit the telecommunications industries in tsunami-sized waves, regulatory bodies such as the Federal Communications Commission, Federal Trade Commission, and Department of Justice are asking two basic questions: What markets do these affect, and by extension, who exactly benefits and gains from these deals? The answers, due to their complicated nature, will play out over the next few months.
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