The NYT Wants The Comcast/TWC Merger Blocked, But Can't Get Their Facts Straight

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 |  Includes: CMCSA, TWC
by: Dan Rayburn

I get that many people have very strong opinions when it comes to the topic of the Comcast (NASDAQ:CMCSA) and TWC (NYSE:TWC) proposed merger, but when it comes to members of the media, they should distinguish between what are facts versus their opinions. Two mainstream media outlets that continue to provide false or completely inaccurate information on the topic, as well as poor details, are the New York Times and Bloomberg TV.

Yesterday, the editorial board at the New York Times published a piece that calls for the Justice Department and the FCC to block Comcast’s acquisition of Time Warner Cable. One of their arguments against the deal, and one I constantly see repeated by others in the media is that “start-ups and smaller companies without deep pockets” will be at a “competitive disadvantage” against companies like Netflix (NASDAQ:NFLX) that pay to get “better access” to Comcast’s network. This statement shows just how little the New York Times understands about the technology being discussed.

Netflix did a paid interconnect deal with Comcast only because Netflix owns and operates their own network. If you are not the size and scale of a company like Netflix, Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Apple (NASDAQ:AAPL) etc. then you aren’t at a “competitive disadvantage” because you don’t have your own content distribution network. And if you don’t have your own network, you have nothing to connect with at Comcast or any other ISP. This isn’t my opinion it’s a fact. You don’t connect to any ISP unless you operate your own CDN, which no small or even medium sized company does. Only the largest companies in the world have their own CDNs. But the New York Times does not get this as they don’t even use the term interconnect anywhere in their piece. They are giving us their opinion, yet portraying some of their points as facts, which are inaccurate.

Even if the New York Times thinks that small companies and startups will be so badly impacted, why is it they aren’t able to back that up with a single example? Show us one small company or startup that streams content online like Netflix that has said they think this deal impacts them in an anti-competitive way. Another argument of the New York Times is that Comcast would control too much of the high-speed Internet service available in the U.S. While that’s a fair argument to make, the data they use to highlight that is a year and a half old. They use 2012 data from the FCC to say “64 percent of American homes had only one or at most two choices for Internet service that most people would consider broadband.” There is a big difference between having only one choice, and having two.

So saying that 64 percent “had only one” versus “at most two”, isn’t conclusive. So which one is it? One choice, or two? If the FCC data can’t be used to be definitive, then why is the New York Times using that as their source? And if the answer is 64 percent had “at most two” choices for high speed Internet, how many choices does the New York Times feel consumers should have before it’s fair? They don’t say, but it seems as if they are saying two choices is not enough for the consumer.

The New York Times article then talks about data caps on wireless connections, which once again, shows us just how little they understand about the technology they are offering an opinion on. They say “Wireless services can handle streaming video, but many customers of Verizon or AT&T would blow through their monthly wireless data plan by streaming just one two-hour high-definition movie, at which point they would have to fork over extra fees.” I understand the point they are trying to make, but it’s not accurate. Netflix has stated that their average video is delivered at 700Kbps for mobile devices. That means for a two hour movie, one user would consume just over 600MB in one hour. It would take 6.5 hours of video before a consumer would go over a 2GB monthly data plan. If they are going to make a point, they should use data that’s accurate and clearly they don’t know the basics if they can’t even do the math to figure out how many Kbps makes up how many GB in a two hour movie.

At the beginning of The New York Times piece, they say regulators should “block” the deal, but they end the piece by saying that regulators should “challenge this deal”. Challenging it and blocking it are two different things. Which one is it? The New York Times does a disservice to their readers and to the topic being debated when they show they don’t understand the technology being discussed and argue that it should be blocked outright, but then say it needs to be challenged, with special terms created for the deal. The writing and tone of the piece is completely inconsistent in what they are calling for.

The New York Times isn’t the only mainstream media outlet that can’t get the basics right. Bloomberg TV has, by far, the worst coverage I have seen of any news source on this topic. They went so far as to say on air that over 100 companies all co-signed a letter letting regulators know they are against the proposed Comcast and TWC merger. In reality, that’s not at all what the companies said. Their letter was sent to the FCC, and specifically talks to net neutrality and does not mention Comcast, TWC or the merger at all.

Seems no one can debate a topic anymore based on facts, or real data, but rather misconceptions, rumors and false data.