Comcast's little blog slip: Amusing, but of little consequence





Tom Paine



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On Wednesday, Comcast watchdog The Consumerist posted about how Comcast obviously left some editing out in the open briefy on its corporate blog, Comcast Voices, that included a comment to "nuance" the description of any overlap between Comcast and Time Warner Cable territories.

The exact sentence read:




It was an embarrassing and somewhat amusing minor error, but some Comcast critics (there is a group of them who draw dire conclusions from the tiniest things because it gets hits for them, and I don't include The Consumerist among those) were talking about this being a 'smoking gun' that would bring down the Comcast/TWC merger.

This is not a 'smoking gun'. Any overlaps (by my knowledge, not relying on Comcast's evidence) are probably tiny historical oddities. After all, the whole point is that cable operators (except for the occasional overbuilders) didn't want to enter each other's territories. It didn"t make any sense for them to do that. In some cases, there are pieces of old systems out there that are difficult to track, so it may be hard to come up with an exact number.

Comcast spokesperson Sena Fitzmaurice told me by email that Comcast "has previously disclosed in its FCC filings that there may be some de minimis overlaps between the Applicants, which FCC precedent makes clear pose no competitive issues."

It estimated that 2,800 overlapping residential or small- or medium-sized business customers, and approximately 215 business customers, in Comcast and TWC service areas. This number would be substantially reduced after the merger is completed, Comcast said. There is also some Comcast-Charter overlap and TWC-Charter overlap of similar magnitude in some zip+4 area, although its not clear whether those customers could receive services from both providers. There are also some minor overlaps (again of similar magnitude) in areas that Insight had overbuilt (supplied a competitive system) in TWC territories. TWC acquired Insight in 2011.

These are out of tens of million subscribers of these companies, collectively. There definitely are issues to consider in this merger, but eliminating (currently) overlapping competitors isn't one of them. The question of whether TWC and Comcast could be future competitors if there is no merger is a different one.


Below is the complete text of the (partial) FCC filings provided to me by Comcast:


“The Comcast-TWC Public Interest Statement noted de minimis overlaps of approximately 2,800 residential or small- or medium-sized business customers, and approximately 215 business customers, in Comcast and TWC service areas.12 As a result of the system exchanges and other changes in the Divestiture Transactions, these numbers will be further reduced. Specifically, the number of Comcast residential or small- or medium-sized business customers in these areas will decrease from approximately 2,800 to approximately 780, while the number of Comcast and TWC business services customers in these areas will decrease from approximately 215 to approximately 190. Also, there are similarly de minimis overlaps between certain Comcast systems and some of the systems acquired from Charter in the exchange.13 See Public Interest Statement at n.307; TWC Supplement Letter, June 5, 2014 (4-5).”

“While Comcast, Charter, and TWC serve distinct markets, approximately 2,800 Comcast residential or small- or medium-sized business customers are located in zip+4 areas where Charter serves residential or small-business customers (and the number of Charter customers is similar). And there are approximately 1,500 TWC residential or small- or medium-sized business customers (and 790 Charter customers) located in zip+4 areas where Charter serves residential or small-business customers. These customers are scattered across various 5-digit-zip areas, none of which has more than 260 customers, and it is quite possible that Comcast and Charter (and TWC and Charter) are not even providing overlapping services in some of these fringe areas but rather just have facilities within the same zip+4 area. The overlap for all business services (Ethernet, backhaul, wholesale, voice, etc.), if any, is likely even lower. As Comcast noted, the Commission has previously recognized that such de minimis overlaps are no cause for competitive concern. See Comcast-TWC Public Interest Statement at 127 n.307.”

As the Commission has previously recognized, such de minimis overlaps are no cause for competitive concern. See Insight-TWC Order ¶ 20 (“[W]e find here that the 2,600 Insight customers (out of approximately 643,000 customers system-wide) in the overbuild area represent a de minimis reduction in competition that is unlikely to have an adverse effect warranting divestiture or other conditions.”); AT&T Broadband-Comcast Order ¶ 153 (“Comcast and AT&T Broadband largely compete in separate geographic markets, and, to the extent their service areas overlap, we find no material increase in concentration that would raise the potential of competitive harm.”); Adelphia Order ¶¶ 81, 82 n.287 (“Since the Applicants generally operate in non-overlapping territories and do not compete with each other in the distribution markets they serve, the proposed transactions would not reduce the number of competitive alternatives available to the vast majority of households. . . . In the few areas where Time Warner and Comcast have overlapping service areas, the number of affected subscribers is very low.”).

If anyone out there is located somewhere where they currently have a choice between Comcast and TWC, please let me know.


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