The Vertical Concerns of a Horizontal Merger

Programming Affiliations (at least 5% ownership)

	National	Regional News	Regional Sports
Comcast	50	3	23
Time Warner	4	40	24

 Source: FCC Annual Competition Report, 2013

Comcast’s owns or has strong ties to valuable programming – the suite of NBC-U programming, both produced content and live events, and regional programming, both news and sports.  TWC has strong vertical ties too.  Will the merged firm use its significantly larger size to extract higher programming prices or withhold programming from non-affiliated ISPs?   Will the firm use its larger size to negotiate more favorable programming terms from non-affiliated content owners like CBS and Viacom?  As a result, will these non-affiliated vertical firms, ISPs and programmers be harmed?  What will it do to the already weak competitive environment in most communities? 

Today, as a Verizon FIOS customer in the Philadelphia metro market, I do have cable and broadband provider choices, namely Comcast, Dish, and DirecTV.  And, if the Comcast-TWC deal goes through, the number of provider choices I have will not change.  But, what will happen to the size of my Verizon TV bill?  I already pay a $2.42/month surcharge for the Regional Sports Networks provided by Comcast (that I don’t watch).  Will Verizon be able to effectively compete on price and service going-forward?  Or, will it be a matter of time, before Verizon exits the market like it has done elsewhere?