There are several big deals brewing this year that together would change the information and communication landscapes drastically. Consumer advocates and open Internet groups say the proposed changes pose significant threats to public use of the Internet, which has been relatively open and accessible up to now. Here are the major deals or rulings to watch:
COMCAST TO BUY TIME WARNER CABLE
• Proposed in February, this $45 billion deal would merge the first- and second-largest cable TV and Internet providers in the country. The merger would give the new Comcast-controlled company about 40 percent of all the wired, broadband Internet customers in the country.
Why it matters: Analysts and consumer advocates say an Internet provider that large would feel less pressure from competitors to keep prices low and would wield more clout in dealing with government regulators and content providers. A larger Comcast could likely command higher prices from content providers, and those costs could stifle new business and be passed on to consumers.
Decision time: Most people watching the proceedings predict a decision by the FCC and the Justice Department in late 2014.
FCC CONSIDERS NEW INTERNET RULES
• In January, a federal appeals court struck down the Federal Communications Commission’s open Internet, or net neutrality, rules following a legal challenge by Verizon. The rules had been in place since 2010. The court said the FCC lacked legal justification to impose rules on Internet service providers regarding whether they could block or slow down content. On May 15, the FCC posted its new proposed rules online, for a 60-day comment period.
Why it matters: Opponents say the new rules do not do enough to prevent Internet service providers from giving better treatment to content from companies that pay more, which could lead to some content being slowed or blocked. They argue the rules give those companies too much control over the Internet.
Decision time: The rules may be finalized in the fall or winter of 2014.
NETFLIX PAYS COMCAST FOR BETTER ACCESS
• In February, not long after the FCC’s “open Internet” rules were struck down and Comcast announced it would buy Time Warner, Comcast and Netflix struck a deal where Netflix would pay for faster and more reliable access to Comcast subscribers. Netflix, by some estimates, accounts for 30 percent of all Internet traffic at peak hours, and some Netflix users had been complaining of slow and unreliable service.
Why it matters: Critics worry that this model could lead to the biggest Internet companies with the most money buying fast access and others being relegated to a “slow lane.”
Decision time: It’s already done, but the long-term consequences are yet to be seen.
AT&T MERGING WITH DIRECTV
• In May, AT&T announced plans to buy satellite TV provider DirecTV. AT&T has 16 million Internet subscribers and more than 5 million pay-TV subscribers, while DirecTV has 20 million TV customers. Like the Comcast deal, this needs approval from the FCC and the Justice Department.
Why it matters: The deal would create another Internet and TV giant, fueling fears that an industry controlled by just a few companies will become less and less consumer-friendly and less open to innovation. Also, AT&T has announced it might expand its fiber network – the more desirable conduit for high-speed Internet. But some industry watchers say the pledge is a bargaining chip, and that AT&T might expand its fiber network only if the merger is approved. Conversely, some people think an expanded AT&T will have little competitive incentive to build more fiber networks. So no matter what happens, expanded fiber may be a long shot.
Decision time: No time frame has been set yet.
SUPREME COURT RULING ON AEREO
• About two years ago, a New York company called Aereo began capturing over-the-air TV signals with antennas and then streaming the programs over the Internet to customers for about $8 a month. The broadcast networks challenged the setup in court, saying Aereo shouldn’t be able to make money off their signals without paying them. On June 25, the Supreme Court ruled in the broadcasters’ favor, putting Aereo’s future in doubt.
Why it matters: The decision could stifle other new companies challenging the status quo of the cable and Internet conglomerates.
Decision time: The Supreme Court has ruled, now it’s a wait-and-see period for the fallout.