Just because you can do something doesn’t mean you should. Analyst Jason Bazinet of Citigroup estimates in a new report that combining Comcast with Time Warner Cable could achieve $1.6 billion in programming savings and could add something like $7.1 billion, or $2.46 a share, to Comcast’s value.  That mega-company would control about 37% of the U.S. cable market — permittable now that rules barring cable companies from controlling more than 30% of the U.S. cable market have been overturned

The analyst’s assumption is that regulators would cast a blind eye to this oligopoly because new TV entrants like AT&T, Verizon, Dish Network and DirecTV redraw the traditional definition of what constitutes the pay TV market. But he’s conveniently forgetting these giants’ move into telephones, Internet and wireless, and their growing ability to dictate the terms of content distribution.

Wall Street might get richer from such a scheme, but consumers would be poorer as rates rise and programming choices fall.

Posted under Michael's Blog