Disaster averted: The Comcast-TWC merger is dead

The dreaded mega merger is kaput, but the central problem remains: We need more ISP competition

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To anyone without a significant financial interest, the proposed Comcast/TWC merger seemed like probably the worst idea in a decade of bad ideas. The millions of Americans who have little or no choice in using these already massive Internet service providers have ranked them below the IRS in terms of customer service satisfaction. We have borne witness to a steady stream of public complaints about how Comcast does business, to the point where customers have resorted to recording their interactions with Comcast customer service and technical support, then making those recordings public in order to get a modicum of reasonable service -- and most of those people have no other choice for Internet access where they live.

Nevertheless, for more than a year now we've had the twin specters of the Net neutrality fight and the Comcast/TWC merger hanging over our heads, threatening to destroy the Internet as we know it. In a future where Net neutrality had been gutted and the Comcast/TWC merger had succeeded, media and communications in the United States (and the world by extension) would be vastly, grimly different. We would have created a media and communications company that was twice the juggernaut of pre-1983 AT&T, with orders of magnitude more presence in the lives of American citizens. This monster would have the green light to do whatever it wanted with news, information, entertainment -- basic access to any part of the Internet.

[ Also on InfoWorld: Tom Wheeler makes history with full-on Net neutrality proposal | One small step for the FCC ... | Cut to the key news in tech with the InfoWorld Daily newsletter, our summary of the top tech happenings. ]

We would have watched while the cage was built around us.

But this time, reason appears to have won out. We have won the Net neutrality battle (for now), and the Comcast/TWC merger is dead.

This represents a huge turnaround for a deal that was thought to be all but done a few short months ago. The tidal wave of negative reaction to this merger, accompanied by significant lobbying investments made by companies that would have been strong-armed by the colossus appears to have given federal regulators pause.

One might wonder why it took this long for them to see the light. Aside from regulation, it might be that Comcast started to feel the burn of Google Fiber in a few too many places and decided it might be better off devoting resources to fighting that battle, rather than on buying TWC. Maybe, just maybe, competition in the market is actually starting to work.

However, we shouldn't take a victory lap yet. There will be fallout from the deal whether it succeeded or not. First, Comcast put up no guarantees against the failure of the deal, unlike the failed AT&T/T-Mobile deal that saw T-Mobile walk away with $3 billion in cash and $1 billion in spectrum. That failed deal wound up being a massive boon for consumers as T-Mobile used the windfall to improve its network, offer much better deals, and force heavier competition in the market, which has led to significant improvements in all aspects of mobile voice and data service, pricing, and features.

In this deal, Comcast walks away without paying a dime. You might think that regardless of how it portrayed this merger as inevitable, it wasn't altogether confident it would actually succeed. It also leaves TWC standing at the altar, and we may see predatory moves made by other ISPs looking to consolidate. On the face of it, if Charter Communications merged with TWC, it would still be bad for consumers, but not nearly as disastrous as the Comcast/TWC merger would have been. The fact of the matter is we haven't seen the last of planned consolidation in the ISP space -- in fact, we'll probably see this scenario played out multiple times in the coming years.

Through all these machinations and tortured reasoning, ultimately we know there are only two ways that we provide a clear and stable telecommunications path through the rest of this century: utility regulation or heavy competition, or both. Over and over again, these companies have proved they cannot be trusted to manage their affairs properly, and allowing them to grow even larger makes it worse.

The war for the Internet will continue for the foreseeable future, but the successes of past few battles have given us reason to hope.

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