The new Comcast agreement to purchase Time Warner Cable for the hefty price of $45 billion has led to a lot of talk over the future of Cable TV services and broadband Internet capabilities. Even if Comcast sheds a few million subscribers to dodge monopoly restrictions, it will still become the largest cable service provider in the United States.
Most fears around the Comcast deal focus on a loss of competition and quality. The act of “peering,” or giving better Internet quality to companies that can pay for it – or your “peers” — could squash smaller competitors and lead to a loss of market innovation. To a certain extent this has already happened with contracts between Comcast and video streamers like Netflix, which skip over middlemen to provide peers with extra bandwidth.
However, these concerns may not match the long-term goals of Comcast. The company, under CEO Brian Roberts, is aiming for immense diversification that will see Comcast expanding into services far beyond basic cable, especially when it comes to content creation, TV streaming, utilities and other modern digital capabilities. As consumers move away from cable, this diversification will give Comcast greater freedom for other partnerships. As Felix Gillette noted in Bloomberg Businessweek, “The broadband fees, in turn, should provide Comcast with a reliable fountain of funds to invest in developing a next-generation digital platform to compete with the likes of Google and Apple.”
New Comcast: More Competition, Not Less
If Comcast indeed rises to become a provider of services in competition with the likes of Google and Apple, then the company will have plenty of reasons to increase the quality of its services, apps, and Internet packages. Google, you may remember, is expanding the reach of its fiber optic networks in 2014 and if the new Comcast wants to be a serious competitor on such services, it will have to offer high-quality broadband Internet speeds of its own. Instead of seeing a degradation of Internet speeds, Comcast customers may be in for a pleasant surprise in the coming years.
But a look at utilities also reveals more potential for renewed residential energy options. Here’s the basic idea: Comcast is diversifying into areas like electricity, home security and home automation, too. Part of this diversification involves partnerships with other providers and specialists in these industries – such as the expanded contract with NRG Energy, an energy company that provides electricity for nine states.
These types of partnerships with smaller companies allow providers like NRG to reach more customers, expand into new areas and (this is where it gets interesting) push into new services themselves, like solar power and commercial electricity. The result is more utility options for more customers, and increased competition across multiple levels of the market, with Comcast acting as an enabler.
You, the Buyer
So what do these new deals mean for you as a buyer? Well, that depends on where you live and what services you buy. As more chances emerge for “middleware” companies, your service packages may get a lot more interesting. Bundling Phone, Cable TV and Internet services is a common move these days, but in the coming days you may be able to purchase a package that includes electricity, Phone, Cable TV and Internet, all condensed in one handy bill that also comes with apps and streaming services for your mobile devices.
This stands to revolutionize the way that your typical services operate and could create a very interesting marketplace in the coming years. A variety of utility and service packages could compete with different bundles and deals, all giving you more purchase options and (hopefully) cutting down on your costs.
On a higher level, if the new Comcast is serious about diversifying into more content, then expect to see cable companies begin to offer more direct entertainment options from sources like Walt Disney and 21st Century Fox. Also expect a lot more investment in customer service from giants like Comcast, which tend to receive bad marks when it comes to customer satisfaction.