Commentary

Should Consumers Fear the Comcast Deal?

Would Comcast-NBC raise prices for some consumers and advertisers? It might, for a little while. But there is endless alternative content consumers can switch to, and endless places for advertisers to reach consumers through the Internet. Under these competitive conditions, prices can’t stay high for very long.

We’ve seen this before, of course. Nearly a decade ago, the AOL-Time Warner combination was fraught with similar peril. A vertically integrated content and distribution network threatened not just to raise costs, it was also a step toward media oligarchy, threatening the information core of our fragile democracy.

Except that it wasn’t. Content and distribution are two very different businesses, and a Reuters report last month called AOL-Time Warner “one of the most disastrous corporate mergers in history.” This week, AOL will begin trading separately on the New York Stock Exchange again.

If AOL-Time Warner is an example, Comcast has more to worry about than consumers do.”

More important, ownership of communications platforms does not mean control. Comcast-NBC can no more impinge on communications among Internet users than AOL-Time Warner did.

Just ask the owners of Digg, who in 2007 briefly tried to prevent their users from publishing a once-secret “processing key” that could unscramble commercial HD-DVD and Blu-Ray discs. Users revolted and the “owners” succumbed to their site’s users within hours.

The same thing happened when Comcast ham-handedly degraded a protocol used by a file-sharing system called BitTorrent, popular with some users. Their complaints stood in for lots of consumers’ concerns, and Comcast backed down quickly — before the Federal Communications Commission got involved, it’s worth noting.

Can a large Internet service provider like Comcast use its position to milk super-normal profits from the desirable content of its new acquisition, NBC? Chances of that are low and falling as the new media universe continues to expand. Consumers are in the drivers seat, and Comcast has more to worry about than we do.

Jim Harper is the director of information policy studies at the Cato Institute and the author of Identity Crisis: How Identification is Overused and Misunderstood.