COMCAST TIME-WARNER MERGER: NEEDS CORRECT LEADERSHIP

By James Carlini

The latest merger being questioned is the COMCAST Time-Warner merger which many experts are weighing in on. The problem is some are looking at the wrong end of the horse when they say it’s a bad merger.

In several articles and editorials that I have read, the authors and columnists look at the COMCAST/ Time-Warner (CTW) merger as a bad thing for cable. All the articles seem to focus on the cable industry and content, yet none are even making the argument about the new merged company, let’s just call it CTW, taking on AT&T and Verizon for the customers in the high-speed data markets. Broadband connectivity needs some competition and if you are going to be a competitor, you need some real money to compete in the capital-intensive communications industry.

WHAT BUSINESS ARE WE IN?

When cable companies first came onto the market, their CEOs were not focused on being part of the network infrastructure layer and looking at themselves as a communications infrastructure company. Their focus, and the definition of what business they were in, was the entertainment business.

They developed the delivery system for entertainment content. They did not think about building a communications infrastructure for extended use, even though they were. They were focused on bringing content into homes and did not initially focus on the long-term engineering of their cabling infrastructure. Designing and engineering the delivery system was just a necessary evil.

Now, with the need for real network infrastructure handling high-speed applications, the cabling industry already has a big footprint of cabling which can go head-to-head with anything AT&T has in place.

WHO NEEDS TO RUN THIS MERGED GOLIATH?

They need a CEO who understands who the new major competitors are. The CEO should be looking at AT&T and Verizon as their big competitors, not smaller cable companies or dish companies.

If I was the CEO, I would be looking at how to compete with AT&T and Verizon in the area of broadband connectivity. I would be establishing a whole gameplan to enter each one of their internet subscribers with an alternate high-speed service for their internet business.

There is a huge market out there because AT&T’s U-Verse is so limited. In an earlier article, I pointed out that if you have U-Verse, you cannot get a second line of U-Verse into your house. You can get a dial-up line, but nothing high-speed. (See http://onpurposemagazine.com/2014/01/02/att-misses-the-mark-with-u-verse/ )

I already have the solution at my house. I have U-Verse coming in and I have COMCAST coming in for internet only. I have both network and carrier diversity which is more than 96% of the residential and commercial buildings have as their connectivity amenity.

Buildings with one connection to one network carrier’s central office are obsolete. That was the connectivity solution for the 19th and most of the 20th centuries. This is a great example of what was “best practice” in the last century is not obsolete in this century.

You cannot use a 20th century solution to solve 21st century connectivity issues. Mission critical applications demand redundant connections (preferably in diverse networks).

We need more choices at the end-user’s home for internet connectivity. With competition, prices will go down, not up. With competition, we will be able to accelerate speeds and be competitive within the global markets.

We need to raise the awareness of competitive strategies as well as raise the speeds of connectivity to the end-user. Having another formidable opponent can only force AT&T and Verizon to raise the bar when it comes to speeds going to the end-user. The faster we get to having a ubiquitous network providing gigabit speeds to the end-user, the faster we will re-take our leadership position in the global economy.

CARLINI-ISM: Look to COMCAST/ TW as a new competitor to the incumbent phone companies. Competition is good.