Comcast drops merger with TWC: Consumer lose!

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http://www.bloomberg.com/news/articles/ ... rner-cable

Comcast has officially withdrawn it's acquisition of Time Warner Cable, due to impending government blockage and public backlash.

Comcast has repeatedly stated this acquisition was good for consumers, which would lead to better services and pricing, since competition is hurting the ISP and cable industries.

With Time Warner Cable being absorbed by Comcast, would have given 40%+ marketshare bigger than the next 4 ISP/Cable companies combined.
It would have also given Comcast 80%+ marketshare East of the Missippi, with some states going as high as 97% market share.

Now with resuming competition between the two the major telecoms/cable companies, the industry and consumers are heading for dark times.

Will this resuming competition, will it hurt consumers and the industry as Comcast has repeatedly told regulators and the public?

The title made me think they finally dropped The Weather Channel because it sucked and they through NBCUniversal partially owned it.

Since when has competition not been be beneficial to the customers? Competition drives companies to innovate and drives prices down so consumers benefit from competition.

The oil/gas industry for one... Gas was cheaper when the country was under the standard oil monopoly even adjusted in today's prices.
Since the government break up occurred oil and gas have gotten more expensive over time.

Telecommunications industry, the U.S. government promised us cheaper and better phone service if AT&T was broken up into smaller baby bells.... by 1990 landline phone service went up significantly in price and continues to this day.

We were also promised cheaper cell phone service once deregulation and new competition was allowed on the market.
Every year our cell phone plans increase significantly.
Hell Verizon this week openly stated it didn't want customers who wanted lower prices, because it wasn't in the company's best interest.

DSL and broadband prices have increased as well...

Many Analysts showed the government how prices would greatly decrease in markets where Comcast would have an outright monopoly post TWC acquisition.

The price of x86 processors went up in 2013, as the chip makers decided it was in their best interests to raise prices.
Microsoft also raised the price of it's products by 17% (I wrote a paper on both) that same year.
Samsung raised the prices of it's Android phones this year with the launch of S6.


Competition doesn't mean you'll get innovation and cheaper prices.
It just means you get more choice... if you're lucky!

No, you are wrong. Competition is never a bad thing, it always results in driving up innovation and driving down prices. As for your examples, they're pretty faulty. It can be argued that Standard Oil was not a true monopoly which restricted competition but rather that it just out competed its competitors by its quality and efficiency, its market share had already fallen from its peak of 90% to 60% by the time of its break up. Telecommunications isn't worth even talking about, if you don't understand the revolution in innovation that has happened over the last century in that field then I don't know what to say.

There is no proof that either model works as said on paper.

You can easily have competition turn into an oligopoly and/or indirectly collude on market efforts.

Market forces and human drive for profit determine the outcome, not competition.

The belief that Competition always triggers innovation and drives down prices, only works if the market is truly free and fair and customers actually have real choice.
The competition and market must be free of human emotions and act on logic.

But American capitalism is based on maximizing profits at all costs.

Cars have gone up in price, despite having more car makers than ever before.
The only way you can get steel below the current price, is if a country is actively subsidizing their makers to allow them to dump the steel at rock bottom prices.
Cell phones on the other hand aren't really getting cheaper, it's just many companies are selling them at a huge loss, most Android OEMs, Amazon and Microsoft.
Same goes for tablets.
PC makers are struggling to breakeven selling most PCs at their current price.
Their hardware is standardized across the board killing innovation.
Cell phones, tablets and computers are all sold less in 2014 than they did in 2013.
2013 was equal to 2012 in sales as well.
2015 looks to see sales drop even further.

Sony has been able to be market leader (Except for PS3), by towing the status quo instead of actually innovating or dropping prices (should PS4 cost as much as the PS1 and PS2 did when they launched?)
Hell they are the market leader outselling both Nintendo and Microsoft, yet their console has no innovation and has the highest price (Xbox One is $350 or less with games bundled in depending on country, Wii U is $300 with games bundled in)
Gaming consoles will end up selling less this generation than the previous, unless PS4 pulls PS2 numbers (which is highly unlikely.

Banking and financial have been consolidating since the 90s globally into a handful of institutions controlling the whole system.

There are less retailers than there was in the 1990s.
There are less online retailers than there was in the 2005.

Amazon takes a loss on most products they sell, making menial profits or taking a loss depending on the year.

Did you read all the details on the hearings about the Comcast acquisition of TWC?
Many state regulators, municipalities, economists and more, came out in favor of the acquisition because they said it would lead to cheaper prices, better quality, and more choice.

The point is all industries and markets eventually settle into a few big players, it has happened in every market to date

The next market to see consolidation will be the Android OEM market as many of the OEMs are literally bleeding themselves dry while selling their phones at a decent loss.

The main reason why competition doesn't lead to lower prices is simple... They are normally publicly trade companies who are required by laws in every region to maximize profits for the shareholders.

Actually, concerning Sony, they have a market advantage for this generation of game consoles. They would have had the market advantage with the PS3, but Microsoft pulled an unexpected move which broke Sony's plans.

When Microsoft entered the game console industry with the Xbox, they planned to break into the industry regardless of costs. The Xbox didn't turn a profit, actually it made a massive negative profit. They did accomplish their goal of having a popularly successful console with known franchises.

Sony for the next generation made an incredibly powerful machine that was also incredibly expensive and complex. They did this following the more traditional market trend - i.e. make the console super powerful. In other words, the of PS3 was extremely and massively upgraded. The PS3 had a very innovative architecture and it cost them.
Microsoft, however, released a simpler system that was moderately upgraded (in comparison.) However, because the 360 was cheaper and easier to program for, it became the favored system (despite actually being less innovative as a piece of hardware.) No matter how much Sony discounted the PS3, Microsoft could discount the 360 more. Microsoft gains the market advantage by playing the dominant strategy.
Similarly to the Dreamcast, the PS3 never met it's own potential.

In this generation, Sony used a tit for tat style strategy by using Microsoft's own strategy against them. They secured several several of the PS4's components at cheaper prices than what Microsoft secured their components. In some case, Sony even secured mildly superior components for cheaper prices. Microsoft then made several critical mistakes, chiefly the inclusion of the Kinect, which raised prices and mushed Microsoft down the same path Sony was on for the PS3 (but to a lesser degree.) But Microsoft also made some bad social/political moves which caused outrage. Sony is now in a position to drop prices significantly and beyond what Microsoft could (did, and can.) They haven't because they don't need to. If they did, they could probably sell more, but not at maximized predicted profits. Microsoft practically handed them the market as open season. And Nintendo just grabbed it's niche and ran off.

All this time Nintendo does their own thing. Producing first a massively successful console with a ton of casual games and many brilliant hidden gems. And later releases a niche console, and thus isn't in full competition and will likely be known as a classic, must have, system by fans.

And there it is, incredibly, incredibly simplified. The reason why the PS4 and Xbox One are as they are is because that is where the Nash equilibrium lies.