Comcast Plays Nicer Than TWC Does: Chachas

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Feb. 13 (Bloomberg) -- John Chachas of Methuselah Advisors examines the combination of Comcast and Time Warner Cable in a $45.2 billion deal and what it could mean for the cable industry and customers on Bloomberg Television’s “Market Makers.”

Made it here in the snow and i heard this man dug out his taxicab, is that true?

We got stuck so i had to help out.

You really did?

New yorkers do that.

This time warner/comcast deal you said it they get enough and i will make my way to bloomberg brief why is this a big deal?

It's a huge deal.

The landscape is defined by these kind of transactions and there is a whole bunch of things between programmers access to the internet.

This will require a very heavy review of where power sits between distributors, programmers, and the web so it is very interesting.

If the government does not mind a monopoly because it is not affecting customers, it is potentially going to affect content producers.

The government does not care about that?

I think they will look closely at what the increase -- comcast was always a very powerful company.

It bought at&t broadband and became a large player.

Just because you have power does not mean you misuse it.

They have been a good corporate citizen for the most part.

It's fair to say that if you look at these two fires, it was time warner who through cbs off the air and also has been more aggressive with smaller or grandma's, not comcast.

The question is how they measure market power.

The government usually get that wrong.

The market will look at the concept of being worried about one third of the country is the wrong measurement.

What is the right measurement?

In manhattan, how many people can you buy cable from?

Market power has to be looked at on a market by market basis.

I think they will look at that very closely and there will be lots of scrutiny of the concept of how much is too much power and i think programmers are the ones who are the most nervous.

Not espn and cbs but who could get hurt?

Even them.

Cbs was off the day -- off the air for how many days?

You cannot he is successful programmer not have a relationship with comcast and that is more so after this transaction.

How they manage that relationship with the programmers is really very important.

It's probably where the greatest amount of fertility will be.

Do you think charter/time warner would have been a better deal?

Who knows?

You are combining businesses which do the same thing.

They're both very well run and charter has excellent management.

In the end, the real proof of this will be how many accommodations they have to make to the government.

The government will ask all the wrong questions.


By nature, government looks for answering questions as simple soundbites and this is not simple.

And needs to be done carefully on a market by market basis.

This is no different from the government and derivatives regulations.

In the conversation among television station owners, the definition of a television market is the four or five licensed tv stations.

There are 100 other broadcasters that don't go into the definition of market power on a broadcast level.

Governments tend to ask questions about where the action is.

Do they not know how important bravo is?

In new york and l.a., people say the future is not about cable.

People not have cable anymore.

When you own a home, and you put cable and it still?

You walk into a house and you get an offering to buy telephone, cable and internet and someone is signing up for those that great i think there will be an increasingly large number of young people who access their video maybe not sitting at the television but they are still watching television.

This argument is a little overplayed.

Let's talk about john malone.

On the surface, one would say he lost but did he?

He was not willing to pay anywhere near this.

I think this is a pretty big defeat for charter.

You are number four before.

There were a couple of dogs log were were bigger and the big dog just got bigger.

How you can make up that ground -- we may well see charter and other competitors in the cable arena wanting some accommodations and wanting to buy certain assets and that may go into the mix of the government scrutiny.

You think that will be a number of asset sales?

If you look at every large combination of does this is like this, even american airlines buying u.s. air, the government has to look to grab some piece of this.

I'm not sure they ever do the right thing but there will be some of that like cable markets with pieces that are sold as accommodations.

The real action has to be in internet access where this is the largest source of access in the country.

They are combining the number one and number four.

The issues of web access and fair access particularly for independent programmers who have no power in this game, you could wake up and if you are a tiny programmer, you could have a great single channel like bloomberg.

That negotiation with a jim boeheim of gets -- with a behemoth gets harder.

Do you think the government is not balloting this and if so, what should they ask for a consideration?

Besides moving bloomberg to channel for.

I think there will be a fleet of well-paid lobbyists in washington defining the ask for different constituencies.

Some will be ethnically related and there will be small programmers and there will be religious groups, all caps of people that come to the party saying we need this in order to be supportive of the transaction.

I think it will be a large and long and arduous ride to get to the end of that.

Is there a chance the deal will not go through?

No, i think they are very bright areas where they will have to make some accommodations.

They clearly took the step because they want to define the conversation and did not want to be on the outside.

They will find a way to get it done.

Thank you so much for joining us.

I thank you, your cab driver,

This text has been automatically generated. It may not be 100% accurate.


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