Tuesday, February 25, 2014
Just How Dangerous is a Giant Comcast?
http://www.huffingtonpost.com/2014/02/19/comcast-time-warner-deal_n_4816651.html DUE 3 March 2014. What is the rationale for the government breaking up monopolies? Will Comcast become a monopoly if the merger is allowed to go through? What is predicted to happen to prices if the merger goes through? What will happen to service if the merger goes through? In your view, should the government allow this merger?
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The reason the government had to break up the monopoly wasn't because the size violated the antitrust law, actually it was the way it used that size that was the main issue. They used their power to control companies around them. They forced railroads to slash prices and agree to do business ventures that put many small companies out of business. The Standard oil Company controls 90% of the oil in America. Comcast is being called a monopoly for the reason that they are offering their rival, Time Warner Cable, a 45 billion dollar offer to take control of their company. They would also control broadcast and television networks, movie studios and theme parks. They use to operate and have a 657 million annual revenue, since they started buying out companies it has increased to 64 billion dollar annual company. The average cable TV bill not including taxes, fees, or promotions has increased 97% over the past 14 years. I think they should allow this merge, there is no reason not to. Comcast is a genius company that has billions in assets and we do not have the right to get mad and stop them just because theyre playing the game right and we are jealous
ReplyDeleteThe rationale for the government breaking up monopolies is to avoid excessively high consumer prices and potential corruption. Businesses often merge other companies into theirs for higher profit but consequently take advantage--to an extent--of consumer needs and demand. Few suppliers of TV will bring consumers to demand more Comcast, or at least its branches and extensions. Comcast will monopolize the TV distributor business should this go through. As it is theorized in economic concepts, will set a higher price. To be specific, they will produce at the quantity where MC=MR but set the higher price at which consumers would be willing to pay. This results in a highest price consumers are willing to pay and a quantity that is less than what is desired by consumers as well. Less quantity essentially means, however, less or poorer service. Great for big business, but it takes a hit to consumers' incomes. This should not be allowed by the government. Enough for taking money out of the hands of desperate consumers who essentially consider TV to be a necessity. It's deviously opportunistic. Higher monopoly prices leave less disposable income for consumers to invest into the economy's markets. Logically, it does not make hardly any sense.
ReplyDeleteThe rationale behind the government breakup of monopolies is the same reasoning behind the Anti-Trust Laws of the era of the Robber Barons. Government regulation (supposedly) prevented corruption, skyscraping prices, and the ability of one man to rob millions of their wealth due to the need/want of his supply. If Comcast seals the deal, so to speak, it will become one of the largest monopolies this country has ever seen. The prices will, in fact, skyrocket, due to the fact that every good monopoly produces less and charges more. And with that, the service will undoubtedly become worse on account of the fact that they will not need to compete with other TV companies, and will not need to have nicer workers or more accommodating conditions in order to ensure that you use their network. It is in the country's very best interest for the government to step in and break up the monopoly. I know that America kind of has a TV problem (and yeah, I've seen Wall-E and I know what the future of us TV watchers looks like), but making it too expensive for people to watch won't cause them to go outside instead, rather, it might just start a riot.
ReplyDeleteThe government breaks up monopolies to prevent ridiculously high unreasonable consumer prices. With a monopoly there is no "search" for the best price by the consumer, either they pay the high prices or the give up the service for an inferior one. In this case, instead of cable, everyone will be watching DVDs and listening to the radio. (No more late night shows Ms.Meachum!) Comcast's merger will turn the company into a monopoly. They have already bought many other smaller rivals in the past, their size will continue to grow if they complete this merger. If Comcast follows through with this merger, they will control most of the cable market, which in turn will affect other video streamers such as Youtube and Netflix. Comcast, as a monopoly, will charge high prices above equilibrium and a quantity at equilibrium. I do not think that government should let this merger go through for the benefit of society. What is the point of having antitrust laws and being against monopolies and then disregarding the opportunity to prevent one? Cable and television has become an ingrained part of our society but consumers will pay for it up to a certain extent. The shift from oligopoly to monopoly will cause a decrease in demand and supply, which is not beneficial to our society. A decrease in demand because consumers will search for substitutes and/or inferior goods, and a decrease in supply because the company will provide less and charge more.
ReplyDeleteThe rationale for the government breaking up monopolies is based upon the fact that reduced competition will dramatically raise prices. The government does not want Comcast to become so massive and powerful to the point that it is detrimental to the market. The reasoning for breaking up a monopoly is not due to the size of a company, as this does not violate the Antitrust Law, but rather the way in which the company utilized their size. If the power of a super-massive company is wielded in attempts to uproot and destabilize other companies, that is when the government feels the need to step in and intervene. This rationale was employed to break up Standard Oil, when Rockefeller used his business tactics to eventually control 90% of the oil in America. He used methods such as intimidation of rivals and forced slashing of prices to achieve his ends, and this raised a massive red flag for the government. Comcast is being labelled as a monopoly due to the fact that they are offering their rival, Time Warner Cable, 45 billion dollars to take control of their company. This would also entail assuming the reigns of Time Warner Cables entities, such as controlling broadcast and television networks, movie studios and theme parks. The outcomes of this will likely have massive ripples, as evidenced by Michael Weinberg, a vice president at Public Knowledge, who said in an interview last week that "It just creates this massive player -- this one entity that sits at the crossroads of everything....They don't just dabble in it. They dominate it."
ReplyDeleteIn its infancy, Comcast had a 657 million dollar annual revenue. It soon began buying out companies, and has subsequently increased its revenues to 64 billion dollar annually. The average cable TV bill has increased 97% over the past 14 years. This is primarily due to the massive up-charge that cable companies have been adopting. I feel as if they should most definitely not allow the merge, as this will only increase prices charged to consumers further. As Comcast grows, its prices increase exponentially, which only serve to frustrate the consumer. If the government wants to do something with the consumers' best interests in mind, it will stop the merge.
The rationale used by the government to break up monopolies is that these mega-corporations do not favor the market and its consumers. They claim that once a company dominates a market that prices will skyrocket while consumer quality doesn't change. They also claim that a monopoly will drive out all other companies in the field and hurt the markets of similar goods or services. The government rationale also includes a fear of corruption whose impact has the ability to reach millions of people. According to Comcast, even if the Time Warner merger goes through, they still won't have a monopoly. This merger would still have the company controlling only 30% of the market they're in, which is just at the maximum limit allowed by the now outdated Federal Communications Commission rule. However, this view is not necessarily true. The expansion of Comcast may make it a monopoly in the sense that they would now have the ability to charge higher prices to video companies. There are already markets in which Comcast is the only available service and a merger like this would only expand their dominance. If the merger goes through, it is predicted that consumers will have to pay higher prices not only for Comcast's service, but for things like Netflix and Youtube. According to Comcast, the merger will improve the services provided and expand them. However, many people doubt these claims and expect service quality to actually fall with the merger. I personally think the government should not allow this merger. The merger will most likely create major job loss and lower consumer benefits while Comcast continues to increase revenue. Prices will rise and other companies which don't break trust laws will be damaged against their will.
ReplyDeleteThe government needs to break up monopolies because otherwise the monopolies will get too large and eliminate any potential competition. A lack of competition ruins capitalism, and thus the government must intervene to break the monopolies up and keep the economy healthy. Comcast will not be a monopoly if this merger goes through, but they will own the majority of the market. Because they will own most of the market, they will be a monopoly in some regions where their competitors do not offer services (this is already common now but will become problematic if it is even more common). Comcast will not have any incentive to offer low prices or competitive rates if there is little to no competition. Additionally, the service offered will not be competitive because consumers will not have any other providers to turn to and thus there will be a high elasticity of demand for Comcast television. For all of these reasons the government should not allow the merger to go through. Market forces will not make the economy efficient in this case, because competition will be eliminated and the monopoly will hurt consumers.
ReplyDeleteIt is dangerous to have monopoly in our society. If Comcast gets too big, they can drive up the market price for the services by holding back their goods&services. Overall, breaking or preventing monopoly will benefit the general consumers like us. Comcast will definitely become a behemoth if not carefully taken care of. In fact, Comcast offered $45 billion to acquire its smaller rival Time Warner Cable.The deal would make Comcast, the largest cable company in the country, even bigger. The new communications giant would also control broadcast and cable television networks, movie studios and theme parks that Comcast has swept up in past acquisitions. If the merger goes through, it will not be surprised that we will have to pay $200 for TV cable each month. Comcast can lower their goods&services quality knowing that there is no rival out there. Government will have to break monopolies for the sake of saving consumers' hard-earned money.
ReplyDeleteThe government's reason for breaking up a monopoly is because of its power and its potential to dominate their market completely, kicking out any potential sellers. If the merger is allowed to go through, I believe that Comcast will become more powerful than ever before because they will be offering services to areas that only has them available, which in turn will allow them to set a "monopoly" price. These prices may be so outrageous but people will be forced to either pay for this service or have no service at all, in that they live in a geographically limited area. I believe that the government should not allow this merger to occur since it will greatly alter the economy and this type of monopoly will hurt the consumer, forcing them to spend more money on them when it could be used for other needs.
ReplyDeleteThe rationale for the government breaking up monopolies is not the size of the monopoly, but the way they handle themselves being so big. Comcast will become a monopoly because it will have the most control over the market, and it will be unfair to the smaller companies, who will end up being controlled by it. If the merger goes through, prices will be expected to increase and the service satisfaction will be expected to go down. This is because in order for people to get the good they want, they will be forced to buy from Comcast (the quality won't matter if this is the only way to get the good). The government should not allow this merger because it will force prices up and control other companies.
ReplyDeleteThe government's reasoning behind breaking up a monopoly would be because of their potential to take over the market, while having no other competitors. If the merger is allowed to go through, I think Comcast will be the most powerful company dealing with offering services. This will allow Comcast to set aup a monopoly price of their choosing. The prices may be expensive for the average individual household, but they will be forced to pay it, or they will choose not to have service at all. In my opinion, the government should not allow this merger to occur. The merger will change the economy greatly and the monopoly could be too high for the average household to afford, and possibly leave the consumer without any services at all.
ReplyDeleteThe government breaks up monopolies because they take up too much of the market. With a monopoly in play the other smaller businesses would barely have a chance to strive in the market. Like Standard Oil which controlled 90 percent of the market they ended up having higher prices because they could and less oil which harmed everything overall. Yes, the merger would make Comcast the biggest cable company in the country, even larger. It would allow them to control all the things going on in the market. If the merger goes through Comcast would be able to charge higher rates. Some say the merger would be a good thing for everyone, such as faster internet speed and service. I think the government should allow the merger.
ReplyDeleteThe government's rationale for breaking up monopolies is because of the fact that if a monopoly gets too large, it will charge high prices to consumers and dominate the market that it's in completely. I do not believe that Comcast will become a monopoly if they allow the merger to go through, due to the fact that there are still other large cable, phone, and internet companies available to the public such as AT and T. According to Comcast, Even if the Time Warner merger goes through, they still won't have a monopoly. This merger would still have the company controlling only 30% of the market they're in, which is just at the maximum limit allowed by the now outdated Federal Communications Commission rule." Since Comcast only is allowed to control 30% of the market they are currently in, I don't believe there will be a profound change after the merge. I do not believe the merge should be allowed by the government. Comcast already owns a large portion of the industry, and should not be allowed to own more. Brian L. Roberts, the CEO of Comcast, is already making a high level of yearly income. It is not necessary for Comcast to make the purchase to be a better company. Comcast is good enough as it is currently.
ReplyDeleteAnita Pizzirani (Pizza)
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ReplyDeleteThe rationale for the government breaking up monopolies is to avoid excessively high consumer prices, and to also avoid potential corruption. Businesses often merge other companies into theirs for a better profit return but unfortunately take advantage, to an extent, of consumer demands and needs. Comcast could become a monopoly. Despite other cable companies being out there, but none would be able to compete with such technology, and ideas that Comcast would have a hold of. They could also drive their prices up as they pleased. They would also control broadcast and television networks, movie studios and theme parks. his should not be allowed by the government. We've had enough taking money out of the hands of consumers who desire television, and consider television to be a necessity. It's deviously smart, and opportunistic. Higher monopoly prices leave less disposable income for consumers to invest into the economy's markets. If this is merger is allowed, the same price spikes that occurred with gas prices, would almost certainly happen here. Despite Comcast essentially playing their cards right, all good things must come to an end, or in this case, shouldn't be allowed to star.
ReplyDeleteMonopolies are broken up so that consumer prices for a necessary good do not go so high that people end up bankrupt and slow our economy down. I don't think that Comcast would be a monopoly from going through with the merger because they still have other rivals. They do have characteristics of a monopoly though through vertical AND horizontal integration. I personally don't care if Comcast buys Time Warner Cable since I have U-verse. However, if I was an owner of Time Warner Cable I would see rapid monthly payment increase after the merger and be pretty pissed about it. I think service will be the same or better since it is one company working with more employees than previously. I don't think the government should allow them to go through with it because in this day and age, television is almost a necessary good and they (Comcast) own too much of the market as it is.
ReplyDeleteThe rationale for the government breaking up monopolies is to avoid excessively high consumer prices and potential corruption. According to Com cast, even if the Time Warner merger goes through, they still won't have a monopoly. This merger would still have the company controlling only 30% of the market they're in, which is just at the maximum limit allowed by the now outdated Federal Communications Commission rule. However, this view is not necessarily true. The expansion of Com cast may make it a monopoly in the sense that they would now have the ability to charge higher prices to video companies. These prices may be so outrageous but people will be forced to either pay for this service or have no service at all, in that they live in a geographically limited area. This should not be allowed by the government. Enough for taking money out of the hands of desperate consumers who essentially consider TV to be a necessity.
ReplyDeleteThe government breaks up potential monopolies in order to prevent consumer prices from skyrocketing (unreasonably) and overall market in any sector to be controlled single-handedly by one company. If the merger allowed the deal between Comcast and Time Warner Cable to go through, then Comcast would indeed become a monopoly. By merging, it will own 30% of their market, which is the maximum market share under the Federal Communications Commission Rule. In becoming a monopoly, Comcast will hike up their prices while reducing supply of their services, resulting in a lack of meeting consumer demands. Along with this, their power over the cable industry will adversely affect the businesses of popular video streamers, such as Netflix and Youtube. The government should not allow this merger to pass, because with the overall economic market and consumer concerns in mind, it would be best for all if Comcast did not control more than it already does. By stopping the deal from closing, the government will prevent the inevitable overpricing and insufficient supply to follow.
ReplyDeleteThe government's rationale behind breaking up monopolies is that these mega-corporations will end up reducing competition, which in turn will raise prices. The government claims that a monopoly will drive out all other companies in the field and hurt the markets of similar goods or services. The government fears the growth of Comcast will make it detrimental to the market. Corruption, the government points out, is yet another possible result which has the ability to harm millions if not billions of people.
ReplyDeleteOn the other hand, Comcast believes that even if the Time Warner merger goes through, a monopoly still not be evident as the merger would only have the maximum limit of the company controlling only 30% of the market they're in.
But this is not a 100% true statement. Comcast's expansion may actually prove to define it as a monopoly. This is because Comcast would now have the ability to charge higher prices to other video companies.
In some markets Comcast is the only available service and a merger like this would only further their dominance within the market. If a merger such as this were to go through, it is predicted that consumers will have to pay higher prices not only for Comcast's service, but also for programs such as Youtube and Netflix.
Comcast feels that the merger will only improve the services provided as well as expand them. However, many people doubt these claims and expect service quality to fall with the merger.
Personally I believe that the government, as its job is to protect the consumers and stabilize the markets, should not allow this merger to go through. A merger like this will most likely create major unemployment and lower consumer benefits while Comcast continues to increase revenue.
Both consumers and other companies will be harmed with the prices being dramatically increased.
Monopolies maximize profit and exclude competition with high prices. Because of this, governments break up monopolies in order to regulate profit and keep consumer prices from rising. If the merger for Comcast goes through, it could potentially turn into a monopoly. Comcast is offering its competitor, Time Warner Cable, 45 billion to take control over its company. By this merge, Comcast would control 30% of the cable market, which is the limit established by the Federal Communications Commissions. Prices will sky rocket and the quality of the service will plummet. If Comcast controls a huge portion of the market, it won't be hard for them to charge the consumer a lot while maximizing profit.
ReplyDeleteThe government's rationale for breaking up monopolies in the early 20th century was based on whether or not a new company would be lessening competition in the market. Comcast will come to dominate a great chunk of the American economy at large, and a great deal of the media, but it is all in different forms, so it wouldn't really become a monopoly per se. Prices are neither predicted to drop or to increase at a lower rate, so consumers are forced to assume they will increase at a much higher rate. According to the companies involved, service will be much better, but in reality, if they have less competition and are providing a service, people will pay for it, whether they do it perfectly or with flaws, which leads me to believe that their service will worsen. Honestly, the government should not allow this merger. There are too few companies dictating the media, which could be a very dangerous thing in the long run.
ReplyDeleteThe government breaks up monopolies because they lead to reduced competition which harms the overall market and raises prices. Comcast plans on buying out its competition, Time Warner Cable Company for 45 billion dollars. Since there will be virtually no competition left, they will pretty much become a monopoly. After the merger, Comcast will become the largest cable company in the world. They will also have control over broadcast and television cable networks, movie studios and theme parks. Many people in some areas already have no choice but to subscribe to Comcast and complain about higher prices. If they become a monopoly, they could use their power to starve competitors of resources. They could charge higher rates to stream videos from companies like Apple or YouTube and some channels may be afraid to allow their shows to be streamed online in case Comcast gives them a bad spot in the channel lineup. Other companies will have no choice but to work with them and consider them when making decisions. Although Comcast will only control thirty percent of their market, there are still repercussions to the merger. It can only be deemed a monopoly if it “substantially reduces competition.” Comcast says they only plan on improving services and by contract cannot raise prices until 2018, implying that prices will eventually be raised. Some people think that these expectations won’t be held up after the merger. I think that the government should break up the Comcast and Time Warner monopoly. Businesses shouldn’t just be able to do what they want if it means hurting the market. The consumers have a right to be protected and it’s not fair to force them to pay driven up prices simply because they have no choice in the market. The service probably won’t get any better but the people will be paying higher prices for things like streaming videos from other companies. Other companies will be forced to abide by Comcast’s activities since they don’t want to fall out of favor with the company that controls around thirty percent of the market. Many companies could even be driven out of business.
ReplyDeleteThe main reason on why the government has to come in and break up monopolies is because of how they lessen the competition and raises the price of goods and services. Comcast has recently been interested in buying out one of their main competitors, Time Warner for 45 billion dollars. If this merger does go through, Comcast will be the biggest cable company in the world. If this merger does happen, Comcast will have complete control of their customer’s prices and services. To some people Comcast is the only option, and if they do merge, there prices could go up as well. They could be offering more expensive services for cheaper an overall cheaper quality product (package). I do not think that the government should allow this merger because it would be just unfair for those who pay for these services. If they do allow this merger to go through, it will bring lots of copycats as well.
ReplyDeleteThe government argues that a company that large could affect the overall market with considerable influence and screw consumers. The size of the new company after the merger doesn't necessarily make it a monopoly but the government fears that the company could begin abusing it's power if it goes through with this merger. Prices are predicted to go up and gouge consumers. If there isn't a law against the mergers, then the government can't stop it. They can, however, do something if the new company begins to abuse it's market power.
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